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Full Download PDF of Solution Manual For Fundamentals of Investing Smart Gitman Joehnk 12th Edition All Chapter
Full Download PDF of Solution Manual For Fundamentals of Investing Smart Gitman Joehnk 12th Edition All Chapter
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F. Hedge Funds
2 Smart/Gitman/Joehnk • Fundamentals of Investing, Twelfth Edition
G. Derivative Securities
1. Options
2. Futures
H. Other Popular Investments
Concepts in Review
V. Careers in Finance
A. Commercial Banking
B. Corporate Finance
C. Financial Planning
D. Insurance
E. Investment Banking
F. Investment Management
Concepts in Review
Summary Key
Terms Discussion
Questions Problems
Case Problems
1.1 Investments or Golf?
1.2 Preparing Carolyn Bowen’s Investment Plan
Excel with Spreadsheets
Key Concepts
1. The meaning of the term investment and the implications it has for individual investors
4. Popular types of investment vehicles, including short-term vehicles, common stock, mutual funds
and exchange-traded funds, fixed-income securities such as bonds, preferred stock, and convertibles
6. Other popular investments such as real estate, tangibles, and tax-advantaged investments
7. Investment goals including income, major expenditures, retirement, and sheltering income from
taxes; the latter includes analysis of tax-advantaged retirement vehicles
9. Sources of taxation, types of taxable income, and the effect of taxes on the investor
12. The merits and suitability of various popular short-term investments, including deposit accounts and
money market securities
Overview
This chapter provides an overview of the scope and content of the text.
1. The term investment is defined, and the alternative investment opportunities available to investors are
classified by types.
2. The structure of the investment process is examined. This section explains how the marketplace
brings together suppliers and demanders of investment funds.
4. Returns are defined as rewards for investing. Returns to an investor take two forms—current income
and increased value of the investment over time. In this section, the instructor need only define
return, since there will be another opportunity to develop the concept of return in Chapter 4; also,
providing information about recent investment returns always engages students’ attention.
5. Next, the following investment vehicles available to individual investors are discussed: short-term
vehicles, common stock, fixed-income securities, mutual funds, exchange-traded funds, hedge funds,
real estate, tangibles, tax-advantaged investments, and options and futures. The text describes their
risk-return characteristics in a general way. The instructor may want to expand on the advantages and
disadvantages of investing in each, although they will be treated in greater detail in subsequent
chapters. It is vital for any investor to establish investment goals that are consistent with his or her
overall financial objectives.
6. Once the investment goals have been well specified, the investor can adopt an investment plan
consistent with these goals, select suitable investments, and build a diversified portfolio and
manage it.
7. Personal taxes are discussed in terms of types of income and tax rates. The investment process is
affected by current tax laws. Examples of tax shelters, especially tax-advantaged retirement vehicles,
and tax planning are provided.
8. Once investment goals are established, it is important to understand how the investment process is
affected by different economic environments. The chapter talks about types of investments such as
stocks, bonds, and tangibles as they are affected by business cycles, interest rates, and inflation.
9. Liquidity is defined, and short-term securities that can be used to meet liquidity requirements are
described. The discussion includes a look at short-term interest rates and the risk characteristics of
various short-term securities.
10. The next section covers the various types of short-term vehicles available to today’s investor. The text
provides enough detail about everything from passbook accounts to money market funds to
commercial paper that students should get a good grasp of the differences between the vehicles.
Information on current rates brings realism into the classroom and enhances student perception of the
lecturer as a knowledgeable instructor.
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knowledge greater than any of the sciences. The unfolding soul of a
child is God’s greatest mystery; the science that deals with
developing life is the science that the primary teacher must know.
The little minds of her pupils are like strangers in a strange land. The
teacher is the guide. Her responsibility is of the greatest.
(1) The first day. Important as is the first year, the first day of
school is equally so. Not merely the first day of the first year, but the
first day of every school year. That “first day” impression that the
teacher makes, often has a far-reaching influence. Very frequently it
is a day of confusion for both pupil and teacher, neither knowing just
exactly what is to be done. There is no surer way to complexities than
to open school without detailed plans.
(2) Detailed plans. The simpler the plans the better, but every
detail of the daily program, lesson, assignments, seating, etc., should
be worked out carefully beforehand.
The teacher should meet the pupils with a friendly greeting and
without any hesitancy assign them to their seats, adding such other
instructions as are necessary. However, not too many instructions
should be given; better none than too many.
If parents accompany the pupils, they should be treated with
consistent courtesy and their questions answered firmly. It is always
best to say as little as possible to parents, never forgetting, however,
to be polite. As soon as school is begun, the teacher may tell a story
that will attract the children to her and leave a good impression.
Following the story, lesson assignments should be made. All
assignments and instructions should be simple and plain. If it is
necessary to do some school work, the tasks should be short and so
simple as to be entirely within the ability of the children. Take great
care to leave with them at the close of their first day the feeling of
power to do what will be required of them. In closing the session
mention some delightful bit of work, that “we will do tomorrow.”
In rural schools the first day is even more perplexing than in
village or city schools, because, in the rural school, one teacher has
all the grades. Plans for study, recitations and recesses should all be
made so that any question asked about any phase of the school work
can readily be answered. As in the city school, older pupils should be
promptly assigned to their seats; to allow them to select their own is
poor policy and almost always results in trouble later in the year. If
the teacher knows the names of the pupils, it is a good plan to have
the names on cards placed on the seats in which the teacher wishes
to have the pupils seated. The smaller pupils should also be shown to
their seats and assistance given them in getting their books into the
desk in an orderly manner. After school is called to order the work
for the day should begin at once. The teacher may give an opening
talk if he thinks that is best. However, it is advisable not to do that.
At this stage of the work it is very prudent for the teacher to avoid
making set rules or even feigning authority. Be unassuming. As in
the city school, work on the first day should be simple. The pupils
have had no preparation and cannot respond in recitations.
Sometimes teachers ask the pupils to prepare the lessons first, but
they are in new surroundings and not used to study; it is better to
make assignments and explanations, then fill the remainder of the
day with “busy work,” songs and stories. But whatever the teacher
does must be so done that the pupils will feel that he is in earnest.
Try to send the children home that night with the impression that
this term’s work is going to be a very interesting and happy one.
In the first grade, children tire easily and consequently lose
interest. Therefore, they should have frequent changes from one
activity to another. The lessons should be short, followed by “busy
work,” then a play period, or simply gymnastics. If gymnastics are
used the exercises should be varied. There is such a wide range of
possible exercises that it is easy for any teacher to have plenty of
gymnastic drills or simple games, allowing much activity, which will
interest pupils for many months. None of the exercises of the first
grade should be carried so far as to tire the pupils.
From the foregoing, it is apparent that a well devised daily
schedule is important. It must be workable. There must be no gaps in
it wherein the teacher gives the children idle moments. Material for
use during the day should always be arranged before school opens in
the morning.
3. Regulating the Movements of the Pupils
One of the most necessary duties of the teacher at the beginning of
the year is to train the children to habits of regulated and quiet
movements when passing in and out of the school-room, going to the
blackboard, coming forward to the recitation seats, passing material
for busy work, or during any other concerted action. The first day is a
particularly opportune time for drill in quiet movement, not only
because no lessons have been made ready and, therefore, the teacher
is entirely free to take as much time as is desirable without feeling
that he is encroaching upon other lessons, but also because such
exercises impress upon the children the necessity for quiet
movement at a time when their minds are not prepossessed with
other subjects. The suggestion is likely to lodge firmly in mind at this
time, partly because of the prominence given to the thought and
partly because of the absence of conflicting interests on this first day.
Furthermore, in drilling the children from the start to recognize the
signals and to obey them, the teacher is taking a long step toward
securing control of his room. Of course, he must not expect the
children to learn the whole lesson in one day. Even adults require
“drill” before they can respond perfectly to regulated movements. To
first grade children the signals and directions are absolutely
meaningless until the meaning is taught. Nevertheless, even first
grade children can be taught easily to be quiet and orderly, and if the
drills are given as little games, competitive or otherwise, they will
look upon the whole thing as play and hence will respond heartily.
Suppose, for example, that the inexperienced teacher who enters
the school-room saying to herself, “What in the world can I do to
keep all these wriggling children in order for a whole day!” should
have some of the following drills (abridged from Hillyer’s “Child
Training”[3]) at command to use whenever the children begin to be
disorderly or seem not to comprehend directions.
3. Hillyer, V. M.—Child Training, pp. 14–28.—New York. The Century Co.
(1) Simple directions. Say to the children, “I want to see if you can
do what I tell you, just when I tell you, and just the way I tell you.”
Then give the order: “Stand up.”
Some may obey promptly, some may obey more slowly, some may
hesitate, look around to see what the others are going to do, and
finally, but tardily, rise. Some may pay no attention to the order at
all, but look blankly around or at something else, exactly as if they
had been excepted from the command.
If there is much irregularity in obeying correctly and at once, it
may be necessary to say, “All children stand up,” or, “All of you stand
up,” and this may have to be supplemented by the explanation,
“When I say, ‘Stand up,’ I mean you, John and Mary, as well as the
others.” Then give the order: “Sit down.”
Repeat these orders, “Stand up,” “Sit down,” half a dozen or more
times, until all the children understand what is wanted and obey
promptly, quietly, and without hesitating or lagging.
Have them first imitate you, while you execute the order, as
directed. This is training by imitation. Then have them carry out the
order from the command alone. Give the order, but do not execute it
yourself, or better still, tell the children to close their eyes and keep
them closed while you give the order and they obey. This is to
prevent imitation of others in the class. They are not trained until
they can obey promptly without seeing either the teacher or another
child whom they can imitate.
Further directions may be: “Look up, down.” “Face right side, left
side.” “Place your hands on top of your head, under your chair,
behind your back.”
Afterwards, practice them individually, giving more attention to
those who are unfamiliar with the terms used or are slow to carry
them out.
(2) Simple orders. Give the first direction to a child and wait his
precise fulfilment, asking the class if the child has followed the
direction in every particular, or if he has failed and in what respect
he has failed.
Each time an order is executed the children should be called upon
to suggest where an improvement is needed, as, for example: “John
banged the door.” “He didn’t shut it quietly.” “He made too much
noise in going to the door.” “He asked which door,” or “He
hesitated,” “Took too long,” and so on.
(3) Simple deferred orders. Prepare a list of orders as in the
preceding drill and tell the children you will give each one an order,
but is it not to be executed until you give the word. Then read the list
of orders, putting the name of a child before each order, and when
you have finished, say, “Now, do what I have told you.”
(4) Negative orders. The burden of much of the instructions to
teachers and parents is “Don’t say don’t.” Nevertheless, for purposes
of discipline, practice in obeying negative commands is highly
important, as most laws and rules from the Decalogue down, are
prohibitions: “Thou shalt not.”
Face the children away from you and tell them you are going to
practice them in obeying the order, “Don’t look.” Tell them that when
you have given the order, they are not to look around, under any
circumstances, no matter even if a contradictory order is given, until
you call “Time.” Then give the order and behind their backs try
different devices to entice them into looking. Tell a story and pretend
to illustrate it, saying, for instance, “Jack and Jill went up a hill, like
this” (stamp about or make noisy gestures), “to fetch a pail of water,
like this” (make chalk marks on the blackboard, as if drawing) “and
broke his crown, like this” (drop a book or something heavy), and so
on. Suddenly speak into the ear of one, saying, “Look here,” tap
another on the shoulder excitedly, and so on.
(5) Double orders. Make a list as in drill 3, but with two orders for
each child, thus: “John, hand me that book, and put this on the
table.” Use in the same way as in drill 2.
(6) Prohibitions. Tell the children you are going to practice them
still further in obeying “Don’ts.” Then, give the order: “Don’t make
any sound until I call ‘Time.’”
Allow them to move their heads, arms, feet; even to move about,
though this privilege should be forfeited by any one failing in the
slightest degree to observe the command. Watch and listen for the
faintest sound and have them do the same, but only the teacher must
call attention to any voluntary or involuntary breaking of silence. At
the end of five minutes call “Time.” Discuss with the children what
they could do to observe the command better or more easily and
repeat the exercise.
Then tell them to get into a comfortable position, one that they can
maintain indefinitely, as they are to remain not only silent but
motionless. Ask them to pretend that they are to have their pictures
taken, that the slightest motion, shifting of position or twitching—
breathing and blinking of the eyes excepted—will spoil the picture,
and say, “Now, don’t move till I call ‘Time.’”
Call “Time” at the end of two minutes, as this is a very severe
ordeal. Further practice, however, should make them able to hold
this position for five minutes longer.
Tell the children you are going to command, “Don’t talk,” and then
are going to try to surprise them into talking or asking a question,
but they must say nothing under any circumstances. Tell them they
are supposed to be mutes, without the power of speech—as dumb as
the animals.
Then give the command, “Don’t talk,” but continue to talk yourself,
telling either a story or something about which children would
ordinarily ask questions, and if this does not succeed, abruptly ask
one of the children a question, trying to take him off his guard or to
startle him into a reply.
Any wide-awake teacher will readily perceive how these drills can
be gradually extended to include the concerted movements of the
whole school, furnishing both relief from more fatiguing school work
and pleasure in the performing, while, at the same time reducing the
chaotic movements of untrained children to quiet, restful, intelligent,
coöperative school-room procedure.
The following case illustrates the difficulties of attempting to
secure the more complex forms of regulated conduct without having
first given sufficient drill on obedience to directions.
CONSTRUCTIVE TREATMENT
Two bells should be rung for dismissal. Let the first be a signal for
the children to pass to the dressing-room for their wraps. Let them
pass in single file, second row following the first, and so on. Let the
second bell be a signal for leaving the room. Here again, the seating
should determine the places in line. Stand at the door leading out
into the hall. Then give the signal for passing. “First row, second,
third,” and so on. See that no child violates this rule.
When the children are once thoroughly familiar with the order and
with the meaning of the signals, the first pupil in each row may be
entrusted with the leadership of that row and the signals may thus be
dispensed with.
Fire drills should be held at least once a month. Make the
occurrence as unexpected as possible. The regular method of
formation of the lines should be rigidly followed.
When the gong rings, each teacher should immediately drop the
work at hand and say,
“Attention! One, two, three!”
The word “Attention!” signifies a definite attitude of body and
mind. The work at hand should be immediately dropped, the head
raised and the hands at rest, while waiting for the next command. Do
not give the second command until you have the undivided attention
of every child in the room.
“One” signifies to turn in the seat; “two” to rise; and “three” to
pass.
In case it is your week for corridor duty, take your stand
immediately at the head of the stairs.
The lines of the four upper grades should be already formed on the
second floor and stairs leading to the floor below, ready to follow the
lines of the first floor, or signal from the teacher on duty there.
It should take no longer than five minutes to vacate a building
holding fourteen hundred pupils.
COMMENTS
Miss Walker could not expect order in the line when she had
taught no definite procedure. The only thought in the minds of the
children in her room was to get out of the room as quickly as
possible; the manner of doing it was a matter of no consideration to
them.
Children are naturally un-orderly; it is the teacher’s duty to train
them. In this case, she should draw up an order of marching that the
children could follow habitually and without confusion.
CONSTRUCTIVE TREATMENT
Every time your class has occasion to pass from the room, take the
same stand by the door, leading into the hall. Then say, “First row,
please pass! Second, third!” etc. When the last line has left the room,
take another permanent stand in the hall, where you watch the
children to see that they keep in a straight line and march in an
orderly fashion from room to room.
If one or two should “forget” to be quiet, speak to them while in
line. “John, remember the rule for marching in absolute order.”
COMMENTS