Did Cows Munch on McStock?

What do sick European cows have to do with an Illinois-based company? When the company is McDonald's, the answer may be a lot. When news of "mad cow disease," a beef-borne health threat, swept Europe last year, McDonald's felt the pinch as many Europeans stopped eating hamburgers. Financial analysts say the scare ate into sales in Europe, an important part of the company's worldwide operations. Just how much the scare hurt stock prices, no one can say for sure. But McDonald's stock did take a tumble last year. The graph below tracks the price of a share of McDonald's stock. Numbers on the left represent a price range of $25 to $40. Use the dates below to identify the price of McDonald's stock at different points in time during the last year. Source: New York Stock Exchange.

Labeled points mark the beginnnings of the indicated months.

1. In which two consecutive months was McDonald's stock at its lowest point during the 2000-2001 period shown?

2. At about what date during the period shown was McDonald's stock cheapest?

3. In what month did the stock suddenly fall from around $38 to around $33, and then shoot back up to the $38 level?

4. Find June 1, 2000, on the timeline and draw a line straight up to the stock-price graph line. About how much was the stock selling for at that point? (a) $35; (b) $37; (e) $39.

5. Which of the following statements is not supported by the graph? (a) Last spring was a comparatively good time for McDonald's stock; (b) McDonald's stock never lost half its value during the period shown; (c) Summertime gave a big boost to McDonald's sales in 2000.

6. Last month, McDonald's management predicted that the company's stock would rebound in 2001. If the latest price shown on this graph is about $29, how much would the stock have to rise to reach the price it sold for at its highest point over the past year? (a) about $15; (b) about $7; (c) about $10.

ANSWERS

1. September and October 2000. 2. mid to late September. 3. April 2000. 4. b. 5. c. 6. c.