3. Why do you think it is so hard to predict changes in stock price on a day-to-day basis? To encourage students to understand the forces that affect fluctuations in stock prices.

Situation Investing In stocks requires an understanding of the various factors that affect stock prices. These factors may be Intrinsic to the company itself or part of the external environment.

• Internal factors relate to the company itself, such as an announcement of poor or favourable earnings, earnings that are more or less than expected, major layoffs, labour problems, management issues, and mergers.

• External factors relate to wor1d or national events, such as the threat of war, the BP oil spill in the Gulf of Mexico, weather conditions that affect sales, the Bank of Canada's adjustment of interest rates, and employment figures that were higher or lower than expected. By analyzing these factors, you will often learn a lot about why a stock did well or why it did poorly. Being aware of these Influences will help you anticipate future stock movements.

Method Step 1 Working alone, choose a common stock that has experienced considerable price fluctuations in the past few years. Here are several examples: BP, Amazon.com, AIM, and Apple. Find the symbol for the stock and the exchange on which it is traded