Property of ASKI SKILLS AND KNOWLEDGE INSTITUTE INC.

GENERAL MATHEMATICS MODULE 6

ASKI Skills and Knowledge Institute, Inc.

Talavera Agricultural and Social Enterprise Training Center (TASEC)

LEARNING MODULE
IN

GENERAL MATHEMATICS
Second Quarter
MODULE 6 : Stocks and Bonds
Week 13 - 14 January 3 – 14 , 2021

IMPORTANT REMINDERS:

1. For questions and clarifications, you can contact your teacher through the following:
a. Text/Call: # 0936-501-9414
b. Messenger: Denmark Santos

Every _____________, from ______________ ONLY. (the provided contact information is for
Educational Purposes ONLY)

2. The deadline of this module’s activities is January 14, 2021 at 5:00 PM. Kindly, compile
your activities in your Portfolio.

3. There will be a deduction in the total score of the assessment if not submitted on time.

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I. MAJOR PARTS OF THE MODULE (REFER TO YOUR PREVIOUS MODULE)

II. MODULE CONTENT

A. CONTENT STANDARD:
The learner demonstrates understanding key concepts key concepts of simple and compound
interests, and simple and general annuities.

B. PERFORMANCE STANDARD:

The learner is able to investigate, analyze and solve problems involving simple and compound
interests and simple and general annuities using appropriate business and financial instruments.

C. TRANSFER GOAL:
Students on their own and in the long run will be able to apply the concepts of basic business
mathematics and logic to formulate and solve real-life problems with precision and accuracy.

D. PERFORMANCE TASK:

BGC, Inc. is planning to create a new blog. (Goal) Months before planning, they conducted an
online survey to collect data on what content readers would want to read on. (Situation) A huge
percentage of the results showed that netizens (Audience) want to know more about
misconceptions of generally accepted ideas. As a blogger, the student was tasked to create a
blog that will focus on busting myths. (Role and Product).

The output will be evaluated according to the following criteria: Correctness of conditional
propositions, persuasiveness, overall appearance of the blog (Standards).

E. LEARNING COMPETENCIES: At the end of this module, you should be able to:

A.3. Identify stocks and bonds (Remembering)

F. SUBJECT MATTER:
Lesson 10: Stocks and Bonds

III. LEARNING CONTENT

LESSON 19 STOCKS AND

Exploring BONDS
the Nature of Communication

Objective/s

At the end of the lesson, the student is able to:

a. illustrate stocks and bonds;
b. distinguish between stocks and bonds; and
c. determine the different markets for stocks and bonds

Before we start with the lesson proper, let us first check what you know about this lesson. Are you ready? Let’s do
it!

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How Much do you Own?

Instructions:

1. Form groups with five members each.

2. Each person in the group will draw an amount from their pockets or wallets.
3. Write each of the amounts on the table below.

4. Write the total amount that you have accumulated. ₱____________

5. Divide each person’s amount by the total amount to get the percentage. Write the answers
below.

If you imagine the total amount as the value of the business, the answers in Number 5 show how
much ownership each individual has.

This activity is done to check your prior knowledge about our lesson. It also aims to
motivate you as we start with the lesson discussion. If you were able to do it and answer
it, congratulations! If otherwise, do not worry, keep on reading and surely you will learn
more.

I believe you are now ready to enhance your knowledge. Let us start discussing our lesson…

FOCUS QUESTION:
What is the importance of learning basic concepts of
stocks and bonds?

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Do you want to be a part owner of the big companies here in the Philippines? In
fact, it is not impossible to be a part owner of these big companies. Have you
heard of the terms stocks and bonds?

Do you know that if you buy stocks of a

certain company, you become one of
the many owners of that company?
Being one of the owners may get you a part of the earnings of that
company. You can get your earnings through their profit or you can sell
your stocks at a higher price if their market value has increased. These
are the ways you can earn money through investing. However, not all
individuals earn money through investing. Some investors lose money,
and so we should know all the risks before we try to invest our money in a
company. In the Philippines, the stock market is governed by the
Phililppine Stock Exchange (PSE).

In this module, we will explore the basic concepts of stocks and bonds and how these terms can be used to
invest our money.

Stocks
In order for some corporations to do an expansion or pay debts, they need money to do such. One way of raising
money to finance such expansion or pay debts is to sell part of their company to investing people or institution.
They do this by issuing stocks.

Definition 1.1:
Stock represents ownership of the company.

The simple activity in Pre-assessment! shows how much ownership each individual has. Owners of stocks may be
considered as part owners of the company. Since a share represents a unit of ownership of a corporation’s profits
and assets, ownership then can be quantified by dividing the number of shares owned by the number of shares
issued. Logically, this means that the more stocks one owns, the more an individual owns in a corporation.

A stock is divided into two types:

1. Common Stock
Majority of stocks are issued this way. Common stock represents ownership on a company and is sometimes
accompanied by dividends on a portion of profits. Investors get one vote for every share to elect board
members who oversee management.
2. Preferred Stock
Preferred stock represents ownership in a company but does not usually come with voting rights. However,
investors are normally guaranteed dividends as long as the investor holds ownership of shares. Also, in the
event of liquidation, preferred shareholders are paid off before the common shareholders.

Bonds

If a private corporation or the government needs to finance a project or an expansion, one solution they do to
is to borrow money from investors. In this case, the private corporation or the government issue bonds.

Definition 1.2:
A bond is a debt financing instrument. This is an interest bearing security
which promises to pay an amount of money on certain maturity value
as stated in the bond certificate.

Bonds may be classified generally into three types:

1. Government Bonds
These are bonds issued by governments to fund programs, meet payrolls, and pay their bills.
2. Corporate Bonds

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These are bonds issued by businesses to help them pay expenses. Although these pose a higher risk than
government bonds, businesses still can earn a lot more in corporate bonds.
3. Zero-coupon Bonds
These bonds make no coupon payments but instead are issued at a considerable discount to par value.

STOCKS
A form of equity financing or raising money by
allowing investors to be part of the owners of the
company.
Stocks prices may vary every day. These prices are
reported in various media (newspaper, TV, internet,
etc.)
Investing in stocks involve some uncertainty. Investors
can earn if the stock prices increase, but they can lose
money if the stock prices decrease or worse, if the
company goes bankrupt.
Higher risk but with possibility of higher returns
Can be appropriate if the investment is for the long
term (10 years or more). This can allow investors to wait
for stock prices to increase if ever they go low.
BONDS
A form of debt financing, or raising money by
borrowing from investors.
Investors are guaranteed interest payments and a
return of their money at the maturity date.
Uncertainty comes from the ability of the bond issuer
to pay bondholders. Bonds used by the government
pose less risk than those by companies because the
government has guaranteed funding (taxes) from
which it can pay it loans.
Lower risk but lower yield
Can be appropriate for retirees (because of the
guaranteed fixed income) or for those who need the
money soon (because they cannot afford to take a
chance at the stock market).

DEFINITION OF TERMS RELATED TO STOCKS

 Stock Certificate – a paper issued to a shareholder which shows on its face the number of shares it
represents.
 Shareholder or stockholder – one who owns shares of corporation stock.
 Dividend – earnings distributed to shareholders of a corporation.
 Certificate number – an accession number or placeholder to keep track of the number of certificates.
 Par Value – the face value of a bond or stock.
 No-par Stock – stock issued without a stated value on the certificate.
 Market Price – the price at which a stock on bond is sold.
 Preferred Stock – type of stock which stockholders get first choice in distributed profits.
 Common Stock – the ordinary stock of a corporation, paying no specified rate or amount of dividend.

Much of the world's business activity would be impossible without stocks and bonds. Stocks and bonds are
certificates that are sold to raise money for starting a new company or for expanding an existing company.
Stocks and bonds are also called securities, and people who buy them are called investors.

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Example 1: Give the term associated with the circled letters.

SOLUTION:
1. Certificate number
2. Number of Shares
3. Name of the corporation issuing the certificate
4. Par Value of each share
5. Name of the shareholder
1
The market price or value of a share of stock is usually quoted in pesos per share. A quotation of “35 2”
means that the price of one share is P 35.50.
Investors make money with stock by selling a stock for more money than they paid for it.
When one buys a stock through a broker (a dealer of stocks, bonds, or real state), the total cost of the
stock is the market price of the stock and the broker’s commission.

FORMULA Total Cost of Stock = Market Price + Commission

Example 2: Rowena bought 100 shares of Per Mill stock at P 150.00 per share. The broker charged her P 750.00
commission. Find the total cost of the stock.

SOLUTION:
Market Price: 100 x P150 = P 15 000 (no. of shares x par value)
Broker’s Commission P 750 (market price + commission)
TOTAL COST: P 15 000 + P 750 = P 15 750.00

Example 3: Find the total cost of each stock purchase below.

No. of Shares Name of Stock Market Price per Share Commission

1 000 ANI P 1.75 P 75.00
2 000 COAL P 0.94 P 94.00
500 FGEN P 30.55 P 763.50
100 FPH P 106.00 P 530.00
750 SMC P 74.45 P 2 792.00
300 URC P 215.00 P 3 225.00

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SOLUTION:

Market Price + Broker’s Commission Total Cost

(No. of Shares x Market Price/Share
1 000 x P1.75 = P 1 750.00 P 75.00 P 1 825.00
2 000 x P 0.94 = P 1 880.00 P 94.00 P 1 974.00
500 x P 30.55 = P 15 275.00 P 763.50 P 16 038.50
100 x P 106.00 = P 10 600.00 P 530.00 P 11 130.00
750 x P 74.45 = P 55 837.50 P 2 792.00 P 58 629.50
300 x P 215 = P 64 500.00 P 3 225.00 P 67 725.00

 Reading the Stock Table

A day’s sales on the stock exchange are shown in leading newspapers the next day. Some quotations from the
Philippine Daily Inquirer for one day are shown below.

TUESDAY, MARCH 10, 2016

PHILIPPINE STOCK EXCHANGE
(As of March 9, 2015)
52-WK- 52-WK- STOCK OPEN HIGH LOW CLOSE VOLUME
LOW HIGH
75.3 68 Asia United Bank Corp. (AUB) 70 70 69.4 70 30 800
116 82 BDO Unibank, Inc. (BDO) 114.2 114.9 113.3 114.3 5 063 820
101.8 84.5 Bank of the Philippine Islands (BPI) 99.8 100.5 98.45 100.5 3 090 470
57.19 45.8 China Banking Corp, (CHIB) 47.5 47.5 47 47.35 45 600
31.6 23.55 East West Banking Corp. (EW) 25.6 25.6 25.35 25.4 82 400
99.15 76.95 Metropolitan Bank and Trust Co. 94.5 94.55 93.5 93.85 8 783 450
(MBT)
75 30 Philippine Bank of 32 32.95 32 32.95 5 200
Communications (PBCOM)
24.4 18.02 Philippine Business Bank (PBB) 18.6 18.6 18.38 18.4 131 600
94.95 76.5 Philippine National Bank (PNB) 83.5 84 83.25 83.3 26 660
139 95 Philippine Savings Bank (PSB) 95.4 95.4 95.4 95.4 1 220
59 45.7 Rizal Commercial Banking Corp. 47 47 46.4 46.4 240 200
(RCB)
172 105.1 Security Bank Corp. (SECB) 167 172 166 169.4 2 217 110
78.79 66 Union Bank of the Philippines 70 70 69.5 69.5 8 480
(UBP)

o The heading STOCK gives the company name Asia United Bank with its symbol (AUB). Usually, the heading
SYM (for symbol) is a separate heading.
o The heading 52-WEEK HIGH gives the highest price at which AUB stock traded during the past 52 weeks.
The price is P 75.30 per share means that during the past 52 weeks, an investor paid P 75.30 for a share of
stock,
o The heading 52-WEEK LOW gives the lowest price at which AUB stock traded during the 52 weeks. The
price is P68.00.
o The heading OPEN stands for the opening price at which AUB stock traded yesterday. This number is 70.
Yesterday, AUB stock trading opening price was P 70.00 per share.
o The heading HIGH refers to the highest price at which AUB stock traded yesterday. This number is 70.
Yesterday, AUB’s lowest trading price was P 70.00 per share.
o The heading LOW refers to the lowest price at which AUB stock traded yesterday. This number is 69.4.
Yesterday, AUB’s highest trading price was P 69.40 per share.
o The heading CLOSE refers to the price at which shares of AUB traded when the stock exchange closed
yesterday. This number is 70. Yesterday, AUB closing price was P 70.00 per share.
o The heading VOLUME refers to sales volume. This is the number of shares traded yesterday. This number is
30 800. This means that yesterday, there were 30 800 shares traded.

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Other headings which are also part of a stock table are Yld%. Net Chg, and PE.
 The heading Yld% refers to percent yield. A percent yield of 2%, means that the dividends alone
give the investors an annual return of 2%.
 The heading Net Chg refers to net change. This is the change in price from the market close two
days ago to yesterday’s market close.

Example 4: READING STOCK TABLES

52-WK- 52-WK- STOCK OPEN HIGH LOW CLOSE VOLUME

HIGH LOW
31.6 23.55 East West Banking Corp. 25.6 25.6 25.35 25.4 82 400
(EW)

Use the stock for East West Banking Corp. (EW) to answer the following questions.
a. Give the highest and lowest prices for the past 52 weeks.
b. Give the highest and lowest prices for EW shares yesterday.
c. What was the price at which EW shares traded when the stock exchange closed on March 9, 2015?

SOLUTION:
a. To find the highest price for the past 52 weeks, look under the heading 52-WEEK HIGH. The price is given
as 31.6. Thus, the highest price for a share of stock for the past 52 weeks was P 31.60. To find the lowest
price for the past 52 weeks, look under the heading 52-WEEK-LOW. The number given is 23.55. Thus, the
lowest price for a share of EW stock for the past 52 weeks was P 23.55.
b. Looking at the heading HIGH and LOW, we have numbers 25.6 and 25.35, respectively. Thus, the highest
and lowest prices for EW shares last March 9, 2015 were P 25.60 and P23.35, respectively.
c. Looking under the heading CLOSE. The number given is 25.4. Thus, when the stock exchange closed last
March 9, 2015, the price of a share of EW stock was P 25.40.

Example 4: Use the March 9, 2015 trading published by the Inquirer to answer the following.
a. During the past 52 weeks, which stock in the table sold at the highest price? At the lowest price?
b. How many shares of PBB were traded on March 9, 2015?
c. For which stocks was the close price also the lowest and highest price for the day?

SOLUTION:
a. During the past 52 weeks, the Security Bank Corp. stock sold at the highest price, P172.00; and the
Philippine Business Bank stock sold at the lowest price, P 24.40.
b. By looking at the heading VOLUME, referring to sales volume, the number on the table is 131 600. This
means that a total of 131 600 shares were traded.
c. The PSB stock and the UBP stocks have close prices which are also the lowest prices. The PBCOM, PSB, BPI
and AUB stocks have close prices which are also the highest prices.

 STOCK INCOME

DIVIDENDS
The income the stockholder receives from his investment is the amount of the dividend he gets. The amount of
dividends paid by the company depends on the profit the company makes. The dividend may be shown either
as a percent of the par value of the stock or as an amount of money per share.

1
Example 5: Ramon owns 75 shares of D&E common stock, par value P 400.00. If the corporation declares a 7 4%
dividend, what is the total dividend that Ramon should get?

SOLUTION:
1
Dividend per share: 0.074 x P 400 = P29 dividend on one share
Total dividend: 75 x P 29 = P 2 175.00

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Example 6: Find the yearly income Mr. Reyes will receive from an investment in 1 000 shares of ABC stock if a
dividend of P 14.80 per share is paid quarterly.

SOLUTION:
Dividend for one quarter: 1 000 x P 14.80 = P 14 800
Yearly income: 4 x P 14 800 = P 59 200

The rate of income on a stock investment is the ratio of the annual dividends to the total cost of stock.

𝐴𝑛𝑛𝑢𝑎𝑙 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠
FORMULA RATE OF INCOME =
𝑇𝑜𝑡𝑎𝑙 𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑡𝑜𝑐𝑘

1
If Robert owns a share of stock that costs P 960 and pays quarterly dividend at P 22.40, the rate of income is 9 3
%.
22.40 𝑥 4 𝟏
Rate of Income = = 0.0933 or 9 %
960 𝟑

 SELLING STOCKS

Another way a shareholder earns an income is to sell his stock. A broker may be used to buy or sell stocks. The
broker’s representatives take charge of the investor’s order. However, selling stock will either make a profit, break-
even, or take a loss. A profit, break-even, or loss depends on the total cost of the stock, the selling price of the
stock, and the expenses in selling the stock. Some expenses to be considered are commission of the broker, small
SEC (Security and Exchange Commission) fees, and sometimes transfer tax.

After deducting all the expenses from the market price of the stock, the money that you will receive is called the
net proceeds.

FORMULA NET PROCEEEDS = Market Price - Expenses

Example 7: Find the net proceed of the stocks on the table below.

Name of Stock Shares Selling Price per Expenses Net Proceeds

Held Share (Commission, taxes, and fees)
Food Corporation 100 P 1 040.00 P 2 640.00
Property Holdings 250 P 500.00 P 1 720.00
Power Corporation 80 P 1 480.00 P 1 880.00
Transportation 300 P 320.00 P 2 240.00
Corporation

SOLUTION: To calculate the net proceeds, use

NET PROCEEDS = Market Price – Expenses
Where Market Price = No. of Shares x Selling Price
a. Net Proceeds = (100 x P 1 040) – P 2 640 = P 101 360.00
b. Net Proceeds = (250 x P 500) – P 1 720 = P 123 280.00
c. Net Proceeds = (80 x P 1 480) – P1 880 = P 116 520.00
d. Net Proceeds = (300 x P 320) – P 2 240 = P 93 760.00

Example 8: If you bought 500 shares of East West Banking Corp. stock at the 52-WEEK LOW, P23.55 per share, and
sold at the 52-WEEK HIGH, P31.60 per share
a. how much money did you make on this transactions (ignoring dividends)?
b. find the broker’s commission if the broker charges 2% of the sale price.

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SOLUTION:
a. Calculate the difference between low price per share and the high price per share.
P 31.60 – P23.55 = P 8.05
Thus, you made P 8.05 per share. For 500 shares you made, P 8.05 x 500 or P 4 025.00
b. Because you are selling the stock at P 31.60 x 500 or P 15 800 and the broker charges 2% of the total sale
price; thus,
P 15 800 x 0.02 = P 316
The broker received P 316.00 as his commission.

Consider the following when you want to invest on stocks:

1. Be a smart investor. Only buy shares of stocks of companies who are earning big money consistently.
The efficient market theory and the stock index will guide you on this aspect.

 The efficient market theory states that the stock market reacts very fast to any information and at any
given period, the market contains the total views of all the investors in the market. Thus, the proponents
of the theory believe that the current price of a stock is the accurate reflection of the investor’s
knowledge about the stock.

 A stock index or stock market index is the measure of the value of a section of the stock market and is
computed from the price of selected stocks. Investors and financial managers use this to describe the
market and compare the return on specific investment. The daily result of stock indexes are the most
popular numbers cited in the investing world.

2. Decide whether you will need a full-service broker, a discount broker, or online brokerage. In online
brokerage, you are allowed to trade stocks directly without a broker. Opening an online trading account
is very similar to opening a normal savings account.

BE CAREFUL! STOCK PRICE

INVESTIGATE! 70
60
50
YOU CAN LOSE MONEY OR 40
MAKE PROFIT IN THE 30
STOCK MARKET 20

We’re done dealing with stocks, let’s learn about Bonds!

Bonds
As we defined earlier, it is a form of long-term
investment issued by a corporation or
government where the purchaser becomes a
creditor of the company.

People who buy a bond are lending money to

the corporation from which they buy the bond.
Hence, a bond is very much like a loan. When a
corporation is selling a bond, it is really selling an
IOU, which is a promise payback the buyer his
money, plus interest rate at a particular time.

There are several reasons for issuing bonds. For

example, the Association of Celebrities and
Talents Society (ACTS) Corporation wants to
borrow P 50 000 000.00 for 5 years for the
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expansion of their business. So, it issues 50 000 5-year bonds with a face value of P 1000.00 each. The entire issue
is often sold to an investment banking house; the bank then sells the bonds to investors at a slight increase in
price over what is paid for them. In this particular case, the banking house may buy then for ACTS Corporation
at P 995.00 each and then sell them at P 1 000.00 each to the investors.

The bonds that are issued are the corporation’s written promise notes to return the price an investor pays for the
bond at the time it was purchased, called the face value, together with interest payments at a given rate.

In the above bond certificate, Ms. Janelle Catalig, the bond holder lent ACTS Corporation one thousand pesos (P
1 000.000) with interest rate of 10% per annum. Hence, on March 1, 2020. ACTS Corporation must pay Ms. Catalig
whether it made profit or not. However, AXTS Corporation has no shareholder to share the corporation’s profit. If
the loan is not repaid, the bond holders may take the corporation’s equipment, buildings, or land. This guarantee
Is an agreement made between the corporation and a bank or trust company, called the trustee. The trustee is
appointed by the corporation to represent the bond holders as a group in their transaction with the corporation.

The following should be considered when buying bonds.

a. The price of the bond
b. The interest rate
c. Whether the bonds can or cannot be resold
d. The earnings record of the issuer
e. The credit history of the issuer
f. The business condition

Note:
 Risk businesses offer high rates of interest to convince investors to buy their bonds.
 There are ratings for bonds which are based on a company’s past performance and whether analysis
predict the company will do well or poorly. Bonds are rated as:
Aaa or AAA for the best and safest bonds
Bbb or BBB for riskier bombs
Ccc or CCC for very risky bonds
Bonds rated D are considered worthless.

Bonds have two kinds of values. These are par value and market value. The
par value of the bond is the same as its face value. This is the amount printed
on the face of the bond which the borrower promises to pay the bond
holder on the due date. In the given corporation bond, showing the bond
holder Ms. Janelle Catalig, the par value is P 1 000.00 The market value of a
bond is the price at which the bond is being sold. It may be greater than or
less than the amount of the par value. If the market value is greater than the
par value, then the bond is selling at a premium. On the other hand, if the
market value is less than the par value, then the bond is selling at a discount.

The market price of a bond is computed by multiplying the par value by the
percent of the par value. Note that “95” means 95% of the par value of the
bond. For example, if the banking house offers ACTS Corporation bonds at
98, the price of one of the corporation’s P 1 000.00 bonds at 98% of P 1 000.00
or P 980.00. However, if the quotes price of a bond is 105, the price of a P 1
000.00 bond would be 105% of P 1 000.00 or P 1 050.00

Example 9: Find the market price of one P 1 000.00 bond at each quotes price.
a. 98
b. 96
c. 102
3
d. 101 4
1
e. 99 2
1
f. 106 4

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SOLUTION:
a. At 98; 0.98 x P 1 000 = P 980.00
b. At 96; 0.96 x P 1 000 = P 960.00
c. At 102; 1.02 x P 1 000 = P 1 020.00
3
d. At 1014; 1.0175 x P 1 000 = P 1 017.50
1
e. At 992; 0.995 x P 1 000 = P 995.50
1
f. At 1064; 1.0625 x P 1 000 = P1 062.50
Note: The bonds in (a), (b), and (e) are selling a discounts and the bonds in (c), (d), and (f) are selling at
premiums.

In order to find the total investment in bonds, you need to know the market price of one bond and multiply
the number of bonds bought.

Example 10: Ms. Johanna Vistan bought fifty P 1 000.00 ACTS bonds at 103. What is her total investment in ACTS
bonds?

SOLUTION:
Market Price of 1 bond: 1.03 x P 1 000 = P 1 030.00
Total Investment: 1 030 x 50 = P 51 500.00

When bonds are bought and sold through a broker, the broker charges a broker’s commission or brokerage fee.
Hence, the amount of investment becomes the market price of the bonds plus the broker’s commission.

Example 11: John Alfonso bought five P 1 000.00 MacQue Outback Corporation bonds at 92 plus P 10.00
commission per bond through a broker. What is John’s amount of investment?

SOLUTION:
Market Price of 1 bond: 0. 92 x P 1000 = P 920.00
Market Price of 6 bonds: P 920 x 5 = P 4 600.00
Commission on 5 bonds: P 10 x 5 = P 50.00
Total investment: P 4 600 + P 50 = P 4 650.00

BOND INCOME

The interest given by the corporation as a government unit who issued the bond serves as the income from the
bond. The interest of the bond is based on the par value. Because the par value serves as the principal, the
interest formula can be calculated as:

FORMULA INTEREST = Par Value x Rate x Time

The interest for five years on a P 1 000.00 par value, 10% bond would be P 500.00.
Interest = 1 000 x 0.1 x 5 = P 500.00

500
If the interest is paid semi-annually, the amount of each interest for the said bond is or P 50 semi-annual
(2)(5)
interest.

1
Example 12: Mr. Santos owns 45 bonds with a par value of P 1 000.00 each and pays 8 % interest. What annual
2
income does Mr. Santos get from these bonds?

SOLUTION:
Par Value oof 45 bonds: 45 x P 1 000 = P 45 000.00
Interest: P 45 000 x 0,085 x 1 = P 3 825

The annual income for one year is P 3 825.00.

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Before buying bonds, it is important to know what rate of income you will receive from them. Hence, this will help
you compare bonds with other types of investments.

The rate of income is the ratio of the annual income to the total investment

𝐴𝑛𝑛𝑢𝑎𝑙 𝐼𝑛𝑐𝑜𝑚𝑒
FORMULA RATE OF INCOME =
𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡

Note: Rate of income is often called yield.

Example 13: Find the yield on P 1 000, 9% ACTS bond priced at 94 plus P 10 commission.

SOLUTION:
Annual Income: P 1000 x 0.09 x 1 = 90
Annual Invested: Market Price + Commission
(0.94 x P 1000) + P 10
P 940 + P 10 = P 950
90
Yield (rate of income) = = 0.0947 = 47%
950

The yield on the investment is 47% or ACTS Corporation bond yields 47%

DID YOU KNOW…

Once you buy a stock you own a small piece of company,
once you buy a bond you are lending your money to that company.

IV. RELATED READINGS/OTHER LEARNING SOURCES

https://youtu.be/P2uIWCn6jXo
https://www.thebalance.com/the-difference-between-stocks-and-bonds-417069
https://www.thesimpledollar.com/investing/stocks/what-are-stocks-what-are-
bonds/

QUOTATION:
Both from the standpoint of stocks and bonds, an investor wants to go
where the growth is – Bill Gross

V. PARENT’S INTERVENTION
Ask your parent this question,

What do you want, to be a stockholder or bondholder?

Explain the difference between the two.

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VI. REFERENCES
CONTENT CLIPARTS/PHOTOS

Oronce, O. (2016), member of the National Council of Teachers https://www.kindpng.com/imgv/oRwoJR_clipart-teacher-parent-

and Mathematics (NCTM), USA; REX Book Store parents-clipart-png-transparent-png/
(www.rexpublishing.com.ph)
https://www.cleanpng.com/free/tree-book.html https://www.pngguru.com/free-transparent-background-png-
clipart-npuuv

https://www.uihere.com/free-cliparts/question-mark-computer- http://cliparts101.com/free_clipart/92746/Students_with_backpacks
icons-clip-art-tips-1780190

https://www.pinclipart.com/pindetail/iiowbox_all-photo-png- https://www.uihere.com/free-cliparts/incandescent-light-bulb-
clipart-clipart-pe-teacher-png/ drawing-clip-art-cartoon-light-bulb-1822997

https://images.app.goo.gl/kR7gqgWQPbB1tAg98 https://www.kindpng.com/imgv/hhThiio_banner-transparent-
download-review-clipart-cool-book-pile/

PART 1: Self-Check!

Please describe your learning experience for this week’s module by shading the
corresponding emoji.

I have fully understood the I have understood most of I have some questions in I need help in
module and I am ready to the concpets presented mind that need to be understanding the
move to the next topic. in the module clarified to better module
understand

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PART II: Activity Time!

Learning Competencies: A.3. Identify stocks and bonds (Remembering)

o Match the terms in Column A to the statements in Column B.

A B
1. Stock certificate a. stock without par value
2. Shareholder b. a dealer in stocks and bonds
3. Dividends c. selling price of stock
4. Market price d, a paper showing shares owned
5. No-par stock e. rate of income on bonds
6. Broker f. a fee charged by a broker
7. Yield g. anyone who owns stocks
8. Broker’s commission h. profit distributed to stockholders

o Writing
1. Describe the difference between a stock and a bond.
2. Describe two ways that investors make money with stock.

This should be submitted to the assigned subject teacher.

Were you able to answer our activity? If not, there might be part of the
lesson you still have to comprehend more. Try reading it again then
accomplish our activity. YOU CAN DO IT!

If you were able to do it, it means that you succeeded in your reading
journey.

Congratulations!

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ASKI Skills and Knowledge Institute, Inc.

General Mathematics
2nd Quarter
Week No. 13-14 (January 3-14, 2021)
NAME:________________________________________________________ SCORE: ________________
GRADE & SECTION:____________________________________________ DATE: ________________
Assessment #7

Activity Title: STOCKS and BONDS

Type of Activity: Writing Activity
Learning Competency: A.3. Identify stocks and bonds (Remembering)
Essential Question: What is the importance of learning basic concepts of stocks and bonds?
Reference/s: N/A

A. Find the total cost of the stock by completing the table. (2 points each)

No. of Stock Market Price Broker’s Total Cost

Shares Commission
98 Beiter Corporation ₱ 93.50 ₱ 458.15
450 Hoyt Industries, Inc. ₱ 87.00 ₱ 1 957.50
2000 Fivics Holdings, Corp. ₱ 103.00 ₱ 10 300
60 Stark Properties, Inc. ₱ 99.75 ₱ 299.25

B. Find the investment by completing the table. The brokage fee is P 240 for each bond if 5 bonds are
purchased, P 200 for each bond if 6 to 49 are purchased, and P 60 for each bond if P 50 or more bonds
are purchased. (2 points each)

No. of Market Value per Bond Brokerage Fee Investment

Bonds held
17 ₱ 2 220
3 ₱ 1 865
85 ₱ 1 570

C. Find the total investment by completing the table. (4 points each)

Shares of Stock Market Value per Share Brokerage Fee Investment

31.5 ₱ 750 6%
9 ₱ 1 727 7.5%
85 ₱ 1 570 4%

C. Answer each of the following: (4 points each)

1. Tom bought 50 shares of MacTec stock at P 685.00 per share and paid P 956.00 commission. Find
Tom’s total investment.
2. A P 200 000.00 bond, paying interest at 8.5% was bought at P 160 000.00 plus P 200.00 commission.
What is the rate of income of the investment?

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Pledge of Honesty

I do solemnly pledge that I answered all the activities and assessments with the best of my
ability. I carefully read the directions and use my understanding to submit my assessment on time. I
did not ask others to accomplish these activities and assessments on my behalf.

I am aware that if my output is proven to be copied and pasted from a source, my score will
be subjected for a deduction or invalidation. I acknowledge that honesty is a virtue that would build
my character as an individual.

______________________________ _________________________________

Name and Signature of the Student Name and Signature of the Parent

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