Teacher/writer/editor

You are to complete this assignment only if you have completed The Globalization of the American Economyassignment.

Prepare a “white paper” on How the collapse of the economy of Greece could affect the American economy.
A “white paper” is an informational paper that also requires the writer to reach definite conclusions and potential solutions.

Please use “Word” using Times New Roman 12 point type double spaced. There is no minimum word requirement.

You all have the basic information to establish your first business plan. Have your first draft of your first year income statements ready to discuss next class.
We will work on the balance sheet during the next class and write the rough draft of your operations plan, marketing plan, and executive summary including the business form you have chosen.

Following that class you will prepare these sections of your plan using Word. Each member of your staff is to prepare some part of your plan.

Each of you print out your part of the plan and the next class you will assemble these and discuss how you will prepare the visual portion of the overall presentation (eg. power point).

You will begin making these presentations the following class.

The following are the quiz questions:
General Business Quiz

Circle the T for true or F for false, or circle the appropriate letter if multiple choice.

1. We are not all consumers. T F
2. Our economic system is a) command b) mixed c) market d) none of these.
3. Economics is defined as a) a society’s money supply b) a society’s income sources c) a society’s wants and needs versus its resources d) none of these.
4. Business satisfies society’s wants and needs. T F
5. Competition usually increases profit. T F
6. A business must make a profit to survive over the long run. T F
7. Competition usually lowers prices. T F
8. Krogers is an example of a company that primarily satisfies wants. T F
9. Businesses that fulfill wants as their primary objective should expect to make higher margins of profit than businesses that fulfill needs as their primary objective. T F
10. What should be produced is a basic question of economics. T F
11. Scarcities, factors of production, and human are resources in an economy. T F
12. Profit is an important business motivation. T F
13. The Dow Jones Industrial Average is a) an average value of 30 newspapers b) a stock exchange c) an average of the stock value of a selected group of industrial businesses d) none of these.
14. Output of books per minute worked in “The Book Factory” exercise was a good measure of a) efficiency of the work performed b) total books produced c) profit d) none of these.
15. If you had your own business, which of the following resources should you consider the most valuable? a) capital b) natural c) human d) none of these
16. A legal principal called the corporate shield means a) a corporation protects its owners (shareholders) from liability b) the owners are solely responsible for the actions of the corporation c) the owners share equally in the liability of the business d) none of these.
17. The greatest advantage of a sole proprietorship is the owner doesn’t have to share the profits. T F
18. There are three forms for a business. T F
19. It is important to balance your checkbook with the bank’s statement monthly. T F
20. The differences and similarity between a debit card and a credit card involve a) the timing of your payment for a purchase b) the connection to your checking account c) how they are used to make a purchase d) all of these.

Investment Risk Levels

Level 4 (Highest) Speculation Options, commodities, precious metals and gems, speculative stocks (eg. penny stocks), junk bonds, collectibles

Level 3 (Higher) Growth Growth stocks, mutual funds (1), real estate, convertible bonds

Level 2 (Medium to Safe) Safety and Income U.S. Treasury securities, conservative corporate bonds, state and municipal government bonds, income and utility stocks, mutual funds (2)

Level 1 Financial Security Cash, CDs,savings accounts, money market accounts, U.S. government bonds, retirement accounts
(1) Mutual funds that invest in growth instruments such as growth stocks (eg. tech
stocks), real estate, or convertible bonds.
(2) Mutual funds that invest in U.S. Treasury securities, conservative corporate bonds, etc.

Investment Exercise:
You each have $1,000,000 to invest during the remainder of this semester. You are to record all purchases and sales on the worksheets provided. I will collect these during the last period of each week, make copies to grade and return the originals to you the same class period.

You must invest one-fourth of your $1,000,000 in each of the four risk levels. Do not invest the total of the one-fourth ($250,000) in any one investment instrument. The objective is to spread your investments out over all four levels.

During the first week after Thanksgiving Break you are to purchase investments for your entire $1,000,000 spread equally among the four levels. You “may” also trade these during that week if you want.
During the following weeks you must make at least one trade per class period and at least four trades per week. You “may” also make trades on your own outside this class. I recommend this. Be sure to record all trades on the worksheet making sure to enter the correct date of the trade. (If you trade outside this class you must also record the time and date of the trade in addition to the symbol and exchange on the back of the worksheet.)

NOTE: You must rebalance your portfolio after each trade so as to have an equal amount of investments in each level after the trade. (Eg. if you make a trade in level 1 and net a profit of $10,000, then you must make trades in all four risk levels to add the $2,500 equal amount.)
Example:
Purchase of 1,000 shares of General Electric (GE) stock for $16.00 per share for total investment of $16,000. in this Risk Level 2 investment.
Sale of the 1,000 shares for $18.00 per share for total return of $18,000 and, therefore, a $2,000 profit. Pay taxes of (8%) $160.00 for net AT Profit of $1,840, and net AT cash of ($18,000 – $160 [tax]) $17,840

Cash is a risk level 1 and so your new cash return of $17,840 goes in this level.

Result:
Level 1 $250,000 fully invested amount + $17,840 = $267,840.
Level 2 $250,000 fully invested amount – $16,000(original GE value) = $234,000.
Level 3 $250,000 fully invested amount
Level 4 $250,000 fully invested amount
Total new investment of all levels total $1,001,840.
Spread this new level equally ($1,001,840 divided by 4) $250,460 for each level.

Simply put, the net AT Profit of $1,840 is divided by four and spread to all levels to get the new required totals. ($1,840 divided by 4 is $460 which is added to the previous level total of $250,000 to get $250,460)