For TARGET

4. Review the price graph provided on the overview page. At Controls enter 6 months or 1 year for the time period to generate a chart of the stock prices. For either the 6-month chart or the one-year chart, under Index Comparisons on the left select one of the major U.S. stock indices (Dow Jones Industrial Average, S&P 500, or NASDAQ Composite) and click on Draw Chart at the bottom of the page to generate comparisons of the price movements of the stock with those of one of these indices.

5. Write a paragraph discussing ONE stock's price performance relative to that of the market as a whole, e.g., the S&P 500, over the past 6 months or year. Your comments are to include statements as to whether the stock's price seems to move up and down with the market or against it, and whether it moves more or less vigorously than the market.

6. Go back to main page for the company you have selected and click on the tab Highlights and review the Profitability Ratios (aka, profit margins) for the past or trailing 12 months (ttm).

Note: The profit margin or net profit margin is also known as the return on sales (ROS), that is, net income (profits) as a percent of sales. See Chapter 3 of the textbook for a discussion.

7. For more complete financial information from the income statements click on the tab Company Financials for the company you have selected and enter the following in the drop down boxes:

Annuals

Income Statements

3 Years/Quarters

Click Refresh

Write a paragraph discussing how profitable the company has been recently. Your paragraph is to include a description of the trend in sales and profitability for the last three years.

8. At your chosen companys Mergent main page click on the Reports tab and then the Equity Report tab. Open the pdf report under Company Name and review the companys rating and rating summary.

9. Write a paragraph explaining what the equity report is saying about investing in the stock. Is there a clear recommendation? What is the recommendation? Your responses are to demonstrate that you have reviewed the sections entitled Earnings Strength, Relative Valuation, and Price Movement.

10. Write 1-2 paragraphs in response to the following questions:

What was the stock's most recent closing price? (Provide the date.)

Is the price moving up or down? (See percent changes under Price Movements.)

Look again at the six-month or one-year "Price Chart" graph. Does the stock seem volatile to you? Think in terms of the range of price movement over the last several months as a percent of an average of the high and low prices.

Note: In ACCT 215-Financial Accounting, you were introduced to the trade-off between risk and return on investments. Specifically, higher expected returns are associated with higher levels of risk, which was defined as uncertainty about the return that will be

earned. In finance, risk is measured by the volatility of returns. In Chapter 9 of the textbook in this course you are introduced to a more precise measure of a stock's volatility: specifically, the standard deviation of an asset's returns.