HOW TO PLAY
the game of investments
STOCK & BONDS will transport you to Wall Street as you attempt to gain wealth and affluence by skillfully buying and selling securities. The game is for from 2 to 8 players-appeals to both juniors and adults.
The main object of STOCKS & BONDS is to shrewdly invest $5,000 in the game's 10 securities, buying and selling for 10 years (rounds) in an attempt to become the wealthiest player.
TERMS
SECURITY-A stock or bond.
BOND- An interest-bearing certificate issued by a private or municipal corporation, usually for the purpose of borrowing money. In the game bonds are issued in $1,000, $5,000 and $10,000 denominations.
INTEREST-Set percentage of bond's value paid to the investor. In the game annual interest (in dollars) is shown on each certificate.
STOCK-Shares or holdings in a corporate business enterprise attested by certificates of ownership. In the game stock certificates are issued in denominations of 10, 50 and 100 shares.
DIVIDEND-Portion of a company's profit distributed to the stockholders. In the game annual dividend (in dollars) is shown on each certificate.
SPLIT (or Stock Split)-The division of shares into a larger number. For example, if a company declares a 2-for-1 split, each shareholder receives free one additional share for each one he already owns; the price per share is halved. Usually this is done to make the stock easier to sell.
TRANSACTION -Purchase or sale of securities.
MARGIN PURCHASE-Buying securities on credit. (See Buying On Margin.)
ROUND LOT-A unit of trading. In the game only round lots of 10 shares or multiples thereof may be purchased or sold.
BEAR MARKET-A declining market. In the game the Bear Market scale of the Calculator is used when an even number is rolled on the dice.
BULL MARKET-An advancing market. In the game the Bull Market scale of the Calculator is used when an odd number is rolled on the dice.
MARKET PRICE-The last reported price at which a stock or bond sold.
SETUP
Choose one player as Board Man and another as Broker. The Board Man receives the chalk, eraser and Stock Board on which he posts the current market prices. The Broker receives the Calculator, which determines the current market prices, and is also responsible for issuing the stock certificates and bonds throughout the game.
The Situation Cards are shuffled and stacked face down on the table.
Each player receives a Securities Review Card and a Record Sheet which indicates the player has $5,000 to invest as he chooses.
PLAY
Stocks listed on the Stock Board have a pre-game price of $100 per share. All bonds are sold at par value ($1,000, $5,000 or $10,000) and their price does not fluctuate during the game.
To determine the current market price of the stocks, player rolls the dice. If an even number is rolled, refer to the Bear Market scale of the Calculator. If an odd number is rolled, refer to the Bull Market scale of the Calculator.
Player rolls the dice again and Broker follows the instructions on the Calculator. Player draws a Situation Card which will further affect one or more of the stocks. The Broker reads how many points each stock rose or fell, taking into account what the Situation Card says, and the Board Man chalks the prices on the Stock Board. Thus, if Stryker Drilling has a market price of $87 in Year 3 and declines 20 points in Year 4, the current price would be $67. However, if the Situation Card turned up in Year 4 says that Stryker Drilling rose 17 points, the price recorded after the corporation's name would be $84 (down 20 points and up 17 from the previous year).
Use your Securities Review Card as a guide in selecting your investments throughout the game. You may buy stocks at the price on the Board and bonds at their par value. Record your purchases for Year 1 on your Record Sheet (see Sample Record Sheet #1) and collect the certificates due you. When all purchases have been made, Year 1 is ended.
Each following year after the current market prices have been posted, the Broker announces that all players should check their certificates to see how much money they have gained in dividends and/or interest. Record the total amount you gained in the Dividends and Interest column (see Sample Record Sheet #2).
The Broker announces that the floor is now open for selling. When all players have recorded any sales they wish to make, the Broker collects the certificates which have been sold. The floor is then declared open for buying. After all transactions have been made, the year is ended.
When the price of a stock reaches $150 or more, the stock splits 2-for-1 (2/1). The price of the stock is halved, and the split is recorded on the Stock Board (see Sample Stock Board). The number of shares you
hold in that stock is doubled, and you receive the proper amount of stock certificates.
When a stock drops below $50, players holding that stock receive no dividends. If the price again reaches $50, the payment of dividends is resumed.
When the price of a stock drops to $0 or below, the corporation is declared bankrupt. Players owning this stock must surrender their certificates, receiving nothing for them. The price of the stock is re-established the following year in the same manner as for Year 1.
After the Closing prices have been posted, figure how much the shares you hold are worth and add this figure to your Cash Balance. No dividends or interest are received in the Closing Year. (Remember you started the game with $5,000.) WEALTHIEST PLAYER WINS THE GAME!
OPTIONAL
The players may decide before the game to roll the dice for each security to determine the first year price per share. Each year following the dice will be rolled once to determine the price per share for all securities, OR:
The players may decide before the game to roll the dice for each security throughout the game. (The marketbull or bear-remains the same throughout the year.) However, if this variation is used, should a 2 or a 12 be rolled, all prices posted for that year are affected (erased), and the points (numbers) on the Calculator for that number (2 or 12) are used to determine that year's prices.
Sample Stock
Board
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Notice that Metro Properties and Stryker DriIIing split 2-for 1 in Year 2. Each player owning shares of these stocks at the beginning of Year 2 receives free an equal amount of shares in that stock. Price for both stocks if traded in Year 2 is $76 per share. |
Sample Record Sheet #1
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Year 1 Investments-Player bought: 20 shares Stryker Drilling. . @ $ 95 per share $1900 leaving balance of $3100 10 shares Uran. Ent ....... @ $ 93 per share $ 930 leaving balance of $2170 10 shares Valley Pwr @ $115 per share $1150 leaving balance of $1020 |
Sample Record Sheet #2
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Year 2-Player figured out his dividends by checking his stock certificates. He put this figure in the appropriate column and added it to his balance giving him a new balance of $1110. Dice were rolled and the new prices were posted. Stryker Drilling went up 56 points per share and split. Player decided to sell for profit (sale price now $76 per share). After placing the price received in the proper column, he added it to his balance to get a new balance of $4150. He noticed that Metro Properties also split and decided to take advantage of the new low price by buying 30 shares (@ $76 each. The amount he paid for these 30 shares was subtracted from his balance. |
BUYING ON MARGIN
As you become more experienced in STOCKS & BONDS, you may wish to vary the game by including Buying on Margin. You buy on margin if you wish to have more working capital (gained by only paying part of the purchase price in that year).
MARGIN: The amount paid by the investor when he uses credit to buy a security, the balance being advanced by his broker. Interest is paid on this balance by the investor until the balance is paid. Margin for the game is set at 50%, and players will be charged 5 % per year on their unpaid Margin Total.
TO BUY ON MARGIN
A margin purchase may not be made until the year following your first cash purchase. When buying on margin, record the transaction in the usual way with the following exceptions:
1. Record only 50 % (1/2) of the total purchase price in the Amount Paid- column. Circle this amount to indicate it is a margin purchase.
2. Add an equal amount (50 % of the total purchase price) to the Margin Total column. (This column represents the total owed on Margin.)
Collect the certificates due you. The following year you must pay the Charges due on your Margin Total. Record these Charges after you record any dividends and/or interest due you. The Charges (5% of the Margin Total) are recorded each year in the Margin Charges (Pd.) column. Your Cash Balance at the end of a year must be enough to cover the charges due in the next year. If your Cash Balance is less than the Charges due, you must sell one or more of your securities to cover the upcoming Charges. If you are unable to raise enough money to meet your obligations, you are declared bankrupt and are out of the game.
If a security held on margin is sold, the balance due on that stock must be paid immediately. All margin balances must be paid before the Closing year. No margin purchases may be made in the 10th year.
If the price of a stock held on margin drops to $25 or below, you must immediately pay the margin balance due on this stock. If the price of a stock drops to $0 or below, the certificates are surrendered, and you must immediately pay the balance.
To pay up a margin balance, record the amount owed (50% of total purchase price) in the Amount Paid column. Draw a line through the corresponding circled amount to indicate this margin purchase has been paid. Subtract the amount paid from your Margin Total column. (Remember to re-figure your Charges for the next year.)
To figure Margin Charges (5% of Margin Total column), simply drop last digit and divide by two.