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Technology Integration Unit

Understanding by Design Stages 1-3 FRIT 8530 Fall 2012 Developed by: Steven Hornyak

UbD Stage 1
Title of Investment Principles Unit Curriculum Mathematics Area
Content Standards: BCS-BI-6. Students will demonstrate an understanding of basic investment principles. a. Illustrate the importance of investing early and the time value of money. b. Illustrate the importance of investing on a regular basis and reinvesting earnings. c. Explain the role of the SEC, NYSE, NASDAQ, and other securities associations. d. Use the tools that analyze the trends and movements of investments. e. Evaluate the relationship between risk and return. f. Analyze sources of investment information (i.e., corporate financial statements). g. Describe the transaction process in buying and selling securities.

Grade Level Time Frame

12th 3 weeks

Stage 1 Identify Desired Results

Understandings
Students will understand that: A thorough knowledge of investment principles is a life skill. A dollar today is worth more than a dollar to be received in the future. Investing on a consistent basis can help individuals reach their financial goals. Risk and reward are positively correlated in securities investing. Securities regulation agencies help keep Americas capital markets in balance. Buying and selling stocks can be done through a broker-dealer either online or in person. Related Misconceptions: Not all investments carry the same amount of underlying risk. Money can be lost just as easily as it can be made in the stock market. Savings accounts are not considered investments. Stocks represent large corporations who can fail just as easily as small ones.

Essential Questions
Overarching Questions: Why do individuals invest in the stock market? Why do investment values fluctuate? How could an investment double in value? How could one investment be a good fit for one person but be a bad fit for another? What is the difference between saving and investing? How important are the national securities associations? Topical Questions: How does FINRA regulate investment activities? Why are mutual funds considered investment vehicles? What is the relationship between time and the value of an underlying investment? To what extent does the relationship between risk and return effect fluctuations in the value of an investment? What are the strengths and limitations of using online databases to research securities? Why is it important to use a broker-dealer when purchasing stocks?

Knowledge and Skills Knowledge


Students will know: The difference between saving and investing. How the time value of money affects investment yields. How to buy securities. What roles the national securities associations play in securities exchange.

Skills
Students will be able to: Analyze a stock listing. Calculate the value of an investment at some point in the future given an interest rate. Differentiate between different investment types. Research an investment. Buy and sell securities.

UbD Stage 2 Stage 2 Determine Acceptable Evidence


Title of Investment Principles Grade 12th

Unit

Level

Stage 1 Identify Desired Results


Students will understand that: A thorough knowledge of investment principles is a life skill. A dollar today is worth more than a dollar to be received in the future. Investing on a consistent basis can help individuals reach their financial goals. Risk and reward are positively correlated in securities investing. Securities regulation agencies help keep Americas capital markets in balance. Buying and selling stocks can be done through a broker-dealer either online or in person. Related Misconceptions: Not all investments carry the same amount of underlying risk. Money can be lost just as easily as it can be made in the stock market. Savings accounts are not considered investments. Stocks represent large corporations who can fail just as easily as small ones.

Essential Questions
Overarching Questions: Topical Questions: How can learning about investments How does FINRA regulate help you become financially investment activities? independent? Why are mutual funds considered How are investments an important investment vehicles? part of our daily lives? What is the relationship between Why do individuals invest in the time and the value of an underlying stock market? investment? Why do investment values fluctuate? To what extent does the relationship between risk and How could an investment double in return effect fluctuations in the value? value of an investment? How could one investment be a good What are the strengths and fit for one person but be a bad fit for limitations of using online another? databases to research securities? What is the difference between saving and investing? Why is it important to use a broker How important are the national dealer when purchasing stocks? securities associations?

Stage 2 - Evidence Performance Task(s)

Performance Task 1: Take a chance, roll the die!


Goal: Your task is to guess the outcome of a series of dice rolls. The challenge is to guess the number that the die will land on. You will be given multiple guesses, but they will cost you potential candy wins. This task will help us better understand the relationship between risk and return. Role: You are to assign one group member to be the referee. The referee will be in charge of rolling the die, ensuring participants are giving honest answers, and passing out candies after every round. There will be five rounds of play. Before every round you will guess as many numbers as they want (1-6). The number(s) chosen should be marked with an X on the appropriate round of the Risk versus Return Chart. After all group members have selected their number(s), the referee will roll the die. If one of the numbers chosen is rolled, group members will receive candies in return for a correct guess. However, the number of candies received is determined by the number of guesses made. The winnings chart determines the number of candies won for each guess. After each round, group members will record the number of guesses made, the number rolled by the die, and the number of candies won. Two activity charts are provided for this task and the activity will be conducted twice so that the referee can be rotated and results can be compared between both rounds. Audience: You need to convince your group members that you have the best strategy for picking the outcome of each round. You may use varying strategies or test ones that you develop during the activity. Situation: The challenge involves making enough guesses to cover the spread of the die but also to not make too many guesses or you will end up not winning any candies. The idea is that the more risk you take (the fewer guesses) the more you win (more candy!). Unfortunately if you only make one guess there are five other possible outcomes besides the one you guess and therefore represent a greater chance of loss. Product, Performance, and Purpose: You will complete the activity chart for two rounds of play in order to determine the number of candies won. At the end of both rounds you will total the number of guesses you made and the number of candies you won for each round. You will then share your guesses versus candies won ratios with members of your group. Standards and Criteria for Success: Your work will be judged by your completion of both rounds of play. You must fill in the activity sheet as well as calculate your guesses versus candies won ratios with your group. Successful completion of this activity shows mastery of the concepts of risk versus potential return and investment philosophy. Facets: Facet 1: Can explain. Can explain the relationship between risk and return.

Facet 2: Can interpret. Can interpret the results of game play in order to show a correlation between risk and return in investments. Standards Addressed: d. Use the tools that analyze the trends and movements of investments. e. Evaluate the relationship between risk and return.

Performance Task 2: Business or Bust!


Goal: Your task is to incorporate a business so that its stock can be listed on the New York Stock Exchange. The goal is to be well capitalized and have positive financial indicators so that your stock meets the listing criteria for the NYSE. The articles of incorporation will include this data which will be presented to the class. Role: You and your group members make up the board a new corporation. You will have to name your company and create a short list of bylaws of incorporation. You will note what business you are in (sector) as well as any products and services that you sell. You have been asked by the investors in the company to present this information at the next board meeting. Audience: Your clients are the investors and potential shareholders in the new corporation. You need to convince them that the company is well valued and that you have followed the listing criteria and are ready to list the corporation as a publicly traded company on the NYSE. Product Performance and Purpose: You will create a listing package that includes the financials of your corporation and shows the financial stability of your company by having positive P/E ratios, EPS, and beta. You will create the package in order to convince your investors and potential shareholders that the company is ready to be incorporated. Standards and Criteria for Success: Your work will be judged by the rubric presented to you. Your presentation should include all aspects of the criteria listed in the rubric and will include feedback given by members of other groups. Facets: Facet 1: Can explain. The student can explain their response to the work they produced. Facet 4: Sees in perspective. The student is able to critique and justify a position. Facet 5: Demonstrates empathy. Facet 6: Reveals self-knowledge Standards Addressed: c. Explain the role of the SEC, NYSE, NASDAQ, and other securities associations. f. Analyze sources of investment information (i.e., corporate financial statements). g. Describe the transaction process in buying and selling securities.

Performance Task 3: Virtual Stock Exchange


Goal: Your task is to research and buy securities inside a virtual portfolio. The challenge will be to find ten different securities that you are willing to purchase and monitor. After three weeks you will take the data from the virtual stock exchange to create a three minute presentation about the portfolio you built on the virtual stock exchange. You will have a total of $10,000 to invest and you will be able to invest any portion of that into each of the stocks. You will develop a risk profile for each stock that includes the stocks: EPS, P/E ratio, beta, market capitalization, and any other metric you would like to include. Role: Your job is to research stocks using various sources of stock data including, but not limited to: www.finance.google.com, www.finance.yahoo.com, www.wsj.com, www.smartmoney.com, and www.investopedia.com. Your will need to be able to defend your stock picks during your presentation. You will purchase ten stocks using the $10,000 given to you by the virtual stock exchange. Audience: The target audience is any potential client of yours. You are not necessarily selling investments during your presentation, you are selling yourself! You will be assessed on the ability to choose investments. No one can predict how stocks will perform but you must be able to defend your choices, using the sources of investment information, to encourage investors to use your as their investment advisor. Situation: The challenge involves dealing with thousands of possible stocks. You will need to be careful about buying just the big brands and focus on finding stocks that are undervalued, growing rapidly, or producing steady dividend returns. You must use the tools at your disposal to find the best investments. Product, Performance, and Purpose: You will create a three minute presentation using the presentation software/materials of your choice in order to convince potential investors to use your services as a financial advisor. The presentation will include information about why you chose the stocks, their metric data (P/E, EPS, beta, valuation), how they performed over the three week period, as well as the sources of your information. Be careful to defend your choices with metric data including exchange information as this can be an important factor in the event your investments perform poorly over the three week period. Remember, we invest for the long-term and three weeks really does not give us an accurate picture of overall return on investment. Standards and Criteria for Success: Your work will be judged by the rubric presented to you. Your presentation must meet the technical standards located in the rubric. You will ultimately be graded on your ability to defend your investment choices, not the performance of those investments, although that data is also an important part of your presentation.

Facets: Facet 1: can explain. The student is able to provide complex, insightful, and credible reasons to explain their investment choices. The student is able to reveal a personalized, thoughtful, and coherent grasp of investment principles. Facet 2: can interpret. The student can effectively interpret securities data. Facet 3: can apply. The student can employ knowledge effectively in diverse, authentic, and realistic contexts. Facet 6: reveals self-knowledge. The student is able to recognize their own investment philosophy and risk profile. The student is able to accept feedback and criticism without defensiveness. Standards Addressed: Illustrate the importance of investing early and the time value of money. b. Illustrate the importance of investing on a regular basis and reinvesting earnings. c. Explain the role of the SEC, NYSE, NASDAQ, and other securities associations. d. Use the tools that analyze the trends and movements of investments. f. Analyze sources of investment information (i.e., corporate financial statements). g. Describe the transaction process in buying and selling securities.

Performance Task(s) Rubric(s)

Rubric 1: Risk vs. Return

Rubric 2: Business or Bust!

Rubric 3: Virtual Stock Exchange

Directions: Share the information gathered using an appropriate web 2.0 tool discussed on the pathfinder or one of your own choosing. You will deliver an oral presentation as well as you walk us through your online presentation which should be 3-5 minutes in length and include: 1. Why you chose the stocks you did? a. Their metrics were in line with your investment strategy, the stock seemed undervalued, together the stocks created a diversified portfolio, etc. 2. Information from the initial investment. a. How many shares were purchased at what market price for each stock inside the Virtual Stock Exchange? 3. A brief overview of each stock included in the portfolio highlighting each of the nine areas researched. Include the following metrics: P/E ratio, EPS, pro forma valuation, book value. 4. Final outcome of the portfolio. a. How did each stock perform, did you lose or earn money, what was the total outcome, etc. 5. Were you satisfied with the stocks you chose? How might a greater investment time frame have impacted your portfolio based on historical return?
Unacceptable Rating Information 1 Students discuss 85% or fewer of the required elements listed above. Student is not prepared to present. Student was vague and brief when explaining the slides. There is little creativity and/or many of the pages are difficult to read. Presentation was more than one minute too short or long. Acceptable 3 Students discuss 851005 of the required elements above. Student seemed prepared and explained each slide; however, was sometimes vague on the details. Most pages are creatively designed using color and animation and are easy to read. Presentation was one minute too short or long. Target 3 Students cover 100% of the required elements above. Student is clearly prepared and thoroughly explained each slide leaving the class with a clear understanding. The pages are creatively designed using color and animation. They are easy to read. Presentation was 35 minutes in length. Your Score/Comments

Effectiveness of Presentation

Quality of presentation slides/media. Time

(e.g. tests, quizzes, work samples, observations) Virtual Stock Exchange Portfolio Assessment (with Investment Strategy Assessment)
SECTION A: Discussion of how you selected your diversified portfolio: (Hint- Use your Pyramid of Risk to help explain how and why you diversified your portfolio.) SECTION B: What is your investment strategy and risk profile? Analysis of Stock Market Portfolio: 2nd Week: Compare 1st week prices to 2nd week prices. Each Stock Last Rise Did the price rise or fall? Why, as time Ticker Symbol Trade Fall permits? Current Price 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Analysis of Stock Market Portfolio: 3rd Week: Compare 2nd week prices to 3rd week prices. Each Stock Last Rise Did the price rise or fall? Why, as time Ticker Symbol Trade Fall permits? Current Price 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Analysis of Stock Market Portfolio: Weeks 1st to 3rd: Each Stock Last Rise Did the price rise or fall? Why, as time Ticker Symbol Trade Fall permits? Current Price 1. 2.

Other Evidence

3. 4. 5. 6. 7. 8. 9. 10. Which stock influenced your overall portfolio the most? Which stock in your portfolio caused the most change in the value of your Portfolio? Portfolio Worksheet: WEEK 1: THE VALUE OF YOUR PORTFOLIO MUST BE $10,000. CASH HOLDINGS: ________________________ VALUE OF STOCKS _______________________ ADD Cash plus Value of Stocks TO GET THE VALUE OF YOUR PORTFOLIO: _____________________ WEEK 2: THE VALUE OF YOUR PORTFOLIO: CASH HOLDINGS: ________________________ VALUE OF STOCKS _______________________ ADD Cash plus Value of Stocks TO GET THE VALUE OF YOUR PORTFOLIO: _____________________ WEEK 3: THE VALUE OF YOUR PORTFOLIO: CASH HOLDINGS: ________________________ VALUE OF STOCKS _______________________ ADD Cash plus Value of Stocks TO GET THE VALUE OF YOUR PORTFOLIO: _____________________

Investment Strategy Assessment


For the following strategies outlined below develop a brochure detailing the strengths and weaknesses of each of the following strategies. STRATEGY 1: BUY AND HOLD ONLY for the Entire Stock Market Period This may be any set of at least 5 companies, which might include your own company. The student uses $100,000 to buy up to 15 companies, but must have at least 5 companies in their portfolio on the beginning week of the project and sells all shares at the end of the project. Any remaining money will go into cash reserves. STRATEGY 2: Trading Strategies: BUY, SELL, HOLD includes Selected Portfolio of at least 5 companies. Option 1: BUY HOLD- TRADE NEW PORTFOLIO The student uses $100,000 to buy any company (UP TO

A MAXIMUM OF 15), trades in the second and third weeks to buy new stocks from capital gains or from the stocks that are not doing well, and buys new companies that are of interest. Each trade has a trading fee of $10 dollars. Excess monies are held in cash reserves, and may be used at anytime to purchase more of the same stocks in the portfolio or new stocks. Option 2: BUY SELL-HOLD Existing PORTFOLIO The student uses $100,000 to buy any company (UP TO A MAXIMUM OF 15, but no less than 5), holds the stock for any length of time, and may sells anytime during the game. $10 dollars is charged for each trade. The monies from the sell go into cash, and can not be used to trade with. This is a commission fee, and is used to make the game reflect the actual costs of online brokerage firms and those executed by discount brokerages. STRATEGY 3: COMBINATION AND SPECIALITY DECISION-MAKING The student may decide what strategy they would like to use during this time period. It may include any of the strategies that you read about in Wall Street Made Simple, for short, short selling or options.

Facets: Facet 1: can explain. The student is able to provide complex, insightful, and credible reasons to explain their investment choices. The student is able to reveal a personalized, thoughtful, and coherent grasp of investment principles. Facet 2: can interpret. The student can effectively interpret securities data. Facet 3: can apply. The student can employ knowledge effectively in diverse, authentic, and realistic contexts. Facet 6: reveals self-knowledge. The student is able to recognize their own investment philosophy and risk profile. The student is able to accept feedback and criticism without defensiveness. Standards Addressed: Illustrate the importance of investing early and the time value of money. b. Illustrate the importance of investing on a regular basis and reinvesting earnings. c. Explain the role of the SEC, NYSE, NASDAQ, and other securities associations. d. Use the tools that analyze the trends and movements of investments. f. Analyze sources of investment information (i.e., corporate financial statements). g. Describe the transaction process in buying and selling securities.

Calculating Percentage Change


Changes in the value of your investment portfolio are important, but what is more important is the percentage change in the value of your stock holdings. If you own a stock priced at $100 and its price increases to $110 that seems pretty impressive, and it is: a 10 percent change. But if you own a stock priced at $10 and its price increases to $20, thats more impressive: its a 100 percent increase! This helps us understand better the time value of money as investments that are held longer tend to have much higher returns over the long run. Percentage change is calculated by using a simple formula:

Percentage Change =

The current price the original price ------------------------------------------------- x 100 The original price

We must multiply the results by 100 to move the decimal point two places to the right so as to be able to express it in percentage terms. In the example above, your $100 stock increased by $10. Therefore, Percentage Change = $110 - $100 ---------------------$100 = $10 -----------$100 = .10 x 100 = 10%

Calculate the percentage change for the following: Round to the nearest percentage. Stock price increases from $34 to $38 = _______________________%. Stock price increases from $4.25 to $10.25 _____________________%. Stock price decreases from $113 to $80 _______________________%. Your portfolio increases from $18,667 to $25,000 _______________%. Your portfolio decreases from $5,532 to $5,122 _________________%. Stock price increases from 11 5/8 to 16 ______________________%. Stock price increases from 2 15/16 to 4 ______________________%. Stock price decreases from 113 3/16 to 85 7/8__________________%. Stock price increases from1/8 to 2 ___________________________%. Company goes into bankruptcy! Stock price decreases from 150 to 0 ______________%.

Facets: Facet 2: Can interpret. The student can effectively and sensitively interpret texts and data. Standards Addressed: a. Illustrate the importance of investing early and the time value of money. d. Use the tools that analyze the trends and movements of investments. e. Evaluate the relationship between risk and return.

Unit Exam
Find the Earnings per share for each companys stock below: ABC Company After tax earnings: $37,000,000 Number of shares: 14,000,000 EPS: __________ Soaring Eagle Computers After tax earnings: $177,000,000 Number of shares: 32,000,000 EPS: __________ Find the Price to Earnings (P/E) ratio for each companys stock below. Massive Dynamic, Inc. Price per share: $43.21 EPS: $3.17 Oceanic Airlines Price per share: $62.79

P/E: ________

EPS:

$1.27

P/E: ________

Calculate the book value of each company listed below: Global Delivery Services Assets: $24,000,000 Liabilities: $7,200,000 Fringe Corporation Assets: $68,700,000 Liabilities: $14,000,000 Company ABC Co Blue Box JSN Inc. Eagle Co. A B C D E F Assets $14M $127M $43M $12M G H I J K L

Book Value: $__________

Book Value: $__________ Liabilities $4.2M $29.5M $17.1M $2M After Tax Earnings $19.6M $21M $34.7M $17.1M M N O P Q R Number of Shares 7,000,000 21,000,000 14,000,000 8,000,000 Beta 7-10 11-14 Financial Advisor Broker Stock Divide Price per Share $32.00 $14.27 $18.77 $9.20 S T U V W X Net Asset Value (NAV) Mutual Fund Book Value Fund Assets Swimming Pools Stock Matching Y Z AA BB CC DD Stock American Stock Exchange Supply & Demand New York Stock Exchange NASDAQ White Chip Stock Book Value Earnings Per Share P/E Ratio

Cyclical Stock Blue Chip Stock Value Stock Bear Market Preferred Stock Earnings Per Share

Speculative Stock Stock split Income Stock Fund Director Fund Manager P/E Ratio

_______ Shares of ownership in the assets and earnings of a company. _______When a share of stock worth $100.00 becomes 2 shares of stock worth $50.00 each. _______The type of stock which pays fixed dividends and owners do not have voting rights. _______This type of market is indicated when stocks are doing poorly and investors are not confident in the economy. _______This type of stock is from companies who operate in major consumer dependent industries such as automobiles and airlines. _______This stock has a low market price considering the companys historical earning records and value of current assets. _______This type of stock is a very high risk. _______Jamison Industries is celebrating the companys 100th anniversary. It dominates the industry with a long standing reputation for quality products and customer service. The type of stock Jamison Industries offers is known as. _______Joey Vietor is 60 years old and about to retire. He has some money he would like to invest in a stock which will pay high dividends because the company chooses to retain only a small portion of its profits. The type of stock Joey should invest assumes low risk. _______This term represents the net worth of a company. _______This indicator is determined by dividing the corporations after-tax annual earnings by the total number of shares of common stock. _______The ratio that indicates how much an investor is willing to pay for each dollar of a companys earnings. _______This indicator measures the stocks volatility to changes in the overall stock market. _______The P/E ratio of a financially successful company.

_______This is the largest stock exchange with the strictest company standards. _______The stock market is based upon this economic law. _______This person is licensed to buy and sell stocks, provide investment advice, and collect a commission on each purchase or sale. _______This exchanges requirements are not as strict as the NYSE allowing it to list younger, smaller companies. _______Buying an ownership stake in a corporation that in turn hires a money manager to invest its money. _______The price of a single ownership stake in a mutual fund. _______Your money combined with other investors money in a mutual fund. _______Mutual funds are like _______The lifeguard of the mutual fund. Multiple Choice: Choose the best possible answer for the questions below. _______ What is the relationship between risk and return? a. Higher risk indicates lower returns. b. Higher risk indicates higher returns. c. Lower risk indicates higher returns. d. No relationship exists between risk and return. _______What is the purpose of a diversified portfolio? a. Individuals should not want a diversified portfolio because it increases risk. b. A diversified portfolio allows people to invest in only one or two stock options. c. A diversified portfolio indicates a person is not a good decision maker. d. An individual decreases his/her risk by investing money in a variety of investment tools. _______Why is issuing stock a popular method used to raise capital? a. The company does not have to repay capital. b. Investors cannot earn money. c. Paying dividends is not an option. d. All of the above _______ What is a way the value of a stock can change? a. Dollar value of a stock increases or decreases. b. A stock split occurs. c. A merger happens between two companies. d. All of the above _______ A growth stock is associated with what kind of company? a. A new company with a consistent record of relatively rapid growth and earnings. b. A company with a spotty earnings pattern but potential for substantial earnings in the future. c. A company which dominates its respective industry and has a good company management reputation. d. A company with a steady stream of income paying high dividends and retaining only a small portion of profits. _______ A blue chip stock is associated with what kind of company? a. A newer company with a consistent record of relatively rapid growth and earnings. b. A company with a spotty earnings pattern but potential for substantial earnings in the future. c. A company which dominates its respective industry and has a good company management reputation. d. A company with a steady stream of income paying high dividends and retaining only a small portion of profits. _______ Brian is 56 years old. He is anticipating retirement in the next ten years. He would like to invest his money in the stock market. What price/earnings ratio would satisfy Brians needs? a. 7-10 b. 15-25 c. 40-50 d. The P/E ratio of a company should not affect Brians choice. _______ What should an investor research to learn a sense of the economy? a. Dow Jones Industrial Average. b. Standard and Poors 500 Composite Index. c. National Association of Security Dealers Automated Quotations (NASDAQ). d. All of the above

_______ When referring to the general health of the economy, stock analysts use what term for a market which is doing poorly and does not have investor confidence? a. Rooster market. b. Bear market. c. Bull market. d. Sheep market. _______ Where is one place stocks are bought and sold? a. Wall Street Journal. b. Standard and Poors 500 Composite Index. c. American Stock Exchange. d. All of the above _______ The prices for stocks and bonds are determined by: a. The size of the companies being traded each day. b. The laws of supply and demand. c. The number of brokers on the trading floor. d. The day of the week. _______What numerical measure should an investor look at when determining how well a companys stock is doing? a. P/E ratio. b. Beta. c. Book value. d. All of the above _______ What information does a stocks 52-week high and low provide? a. The highest and lowest prices the stock was sold at per share during the last 52 weeks. b. The stock price percent change from January 1 of the current year to the present day. c. The number of transactions to the stock in the last 52 weeks. d. The difference between the closing price of the share from January 1 of the current year to the present day. _______ What does it mean if a stocks VOL 100s number is 1561? a. 100 shares of the stock sold for $1,561. b. 100 shares of stock sold for $15.61 each. c. It took 1561 people to process 100 shares of stock.

Facets: Facet 2: Can interpret. The student can effectively and sensitively interpret texts and data. Facet 3: Can apply. The student can extend or apply what she knows in a novel and effective way. Facet 4: Sees in perspective. The student is able to infer the assumptions upon which an idea or theory is based. Standards Addressed: a. Illustrate the importance of investing early and the time value of money. b. Illustrate the importance of investing on a regular basis and reinvesting earnings. c. Explain the role of the SEC, NYSE, NASDAQ, and other securities associations. d. Use the tools that analyze the trends and movements of investments. e. Evaluate the relationship between risk and return. f. Analyze sources of investment information (i.e., corporate financial statements). g. Describe the transaction process in buying and selling securities. Annual Report Observations
A companys annual report has a terrific amount of useful information for investors. Most companies will gladly mail you an annual report with a phone call. Get the annual report of a company that is based in Georgia (there are many including Coca-Cola, Home Depot, Delta Airlines, Southern Company). Or you

might want to get the annual report of a company you chose for the virtual stock exchange task. To help you analyze the company, use the annual report to answer the following questions. Company name: _____________________________________________________ Business or businesses the company is in: A. Sector __________________________________________ B. Industry _________________________________________ C. Name one company that competes with your company. ____________________________________

Where is the companys headquarters? List the company address. ____________________________________________________________________________________ Company Performance: A. How much money did the company make last year? _______________________________________ Compare 1st Quarter 2011 to 1st Quarter 2012. You may also compare a consistent 9 month period, or annual data for 2010 to 2011. B. Is this more or less than the previous year? ______________________________________________ C. What is the company's explanation for the change in performance? ___________________________ D. Does the company seem to be doing better, or worse than the previous years based on increases or decreases in sales, revenues, net income or other performance measures?____________________ ____________________________________________________________________________________ ____________________________________________________________________________________ _____________________________________________________________________________________ Company Officers: A. Who is the CEO? ______________________________________________ B. Who is the CFO? ______________________________________________ C. Board Members?* ______________________________________________

*If you are able to get the Board Members, it will be counted as extra credit.

Facets: Facet 2: Can interpret. The student can effectively and sensitively interpret texts and data. Facet 3: Can apply. The student can extend or apply what she knows in a novel and effective way. Standards Addressed: d. Use the tools that analyze the trends and movements of investments. f. Analyze sources of investment information (i.e., corporate financial statements).

Student Self-Assessment and Reflection


Performance Task 1 Reflection
Answer the following questions as you reflect on Task 1. 1. How did the number of candies won relate to the number of guesses made? 2. Who had the largest return? 3. Did you have a strategy for play? If so, did the strategy work? 4. Did you choose only one number every time? If so, how many candies did you win? 5. Did you choose five numbers every time? If so, how many candies did you win? 6. If you had to give up candies every time you chose a number would you have played differently? 7. How does predicting the outcome of a die role and predicting the performance of a stock similar? 8. How do rolling die and investing in stocks differ? 9. What does this activity tell you about the risk versus return potential? 10. Which strategy is most like putting your money in a savings account? How much return potential is created by playing it safe? Facets: Facet 1: Can explain. The student can explain the relationship between risk and return. Facet 2: Can interpret. The student can interpret the results of game play in order to show a correlation between risk and return in investments. Standards Addressed: d. Use the tools that analyze the trends and movements of investments. e. Evaluate the relationship between risk and return.

Performance Task 2 Self-Assessment


Answer the following questions about your performance in Task 2.
Circle the appropriate response for questions 1-7.

1. I asked questions for information or clarification. not at all rarely sometimes 2. I offered my opinion. not at all rarely sometimes

often often often often

3. I listened to the other group members. not at all rarely sometimes 4. I commented on the ideas of other group members. not at all rarely sometimes 5. I encouraged others to participate.

not at all

rarely

sometimes sometimes

often often

6. I spoke in the target language. not at all rarely

7. I fulfilled my role in the group as assigned by the teacher or group. not at all rarely sometimes often 8. What I liked best about working with this group: 9. What was most difficult about working with this group: 10. How were you able to incorporate the ideas and thoughts of others into your project? 11. How did you feel when others commented on your suggestions? Did you reciprocate the same level of empathy toward their feelings? Facets: Facet 1: Can explain their response to the work they produced. Facet 4: Sees in perspective. Is able to critique and justify a position. Facet 5: Demonstrates empathy. Facet 6: Reveals self-knowledge Standards Addressed: c. Explain the role of the SEC, NYSE, NASDAQ, and other securities associations. f. Analyze sources of investment information (i.e., corporate financial statements). g. Describe the transaction process in buying and selling securities.

Performance Task 3 Self-Assessment/Reflection


How much time and effort did you put into this task? What do you think your strengths and weaknesses were in this assignment? How could you improve your presentation? What are the most valuable things you learned from this assignment? How did risk and return correlate in your completion of this task? What have you learned about the application of technology as it is used to facilitate the operations of the stock market? How might you use technology to invest, especially in on line investing, in the future? 7. Would you invest in your company or in the companies in your diversified portfolio in the future? Why or why not? 1. 2. 3. 4. 5. 6. Facets: Facet 4: Sees in perspective. The student is able to critique and justify a position, to use skills and dispositions that embody disciplined skepticism. Facet 6: Reveals self-knowledge. The student is able to engage in metacognition; recognize strengths and weaknesses.

Standards Addressed: a. Illustrate the importance of investing early and the time value of money. b. Illustrate the importance of investing on a regular basis and reinvesting earnings.

Sources used in Stage 2:


http://www.nclrc.org/portfolio/formCooperativeGroupWork.html http://fefe.arizona.edu/ http://www2.uwstout.edu/content/profdev/rubrics/secondaryteamworkrubric.html UbD Stage 3 Title of Unit Investment Principles Grade Level 12th

Standard: BCS-BI-6. Students will demonstrate an understanding of basic investment principles. a. Illustrate the importance of investing early and the time value of money. b. Illustrate the importance of investing on a regular basis and reinvesting earnings. c. Explain the role of the SEC, NYSE, NASDAQ, and other securities associations. d. Use the tools that analyze the trends and movements of investments. e. Evaluate the relationship between risk and return. f. Analyze sources of investment information (i.e., corporate financial statements). g. Describe the transaction process in buying and selling securities. Understandings: Students will understand that: A thorough knowledge of investment principles is a life skill. A dollar today is worth more than a dollar to be received in the future. Investing on a consistent basis can help individuals reach their financial goals. Risk and reward are positively correlated in securities investing. Securities regulation agencies help keep Americas capital markets in balance. Buying and selling stocks can be done through a broker-dealer either online or in person. Essential Questions:

Overarching Questions: How can learning about investments help you become financially independent? How are investments an important part of our daily lives? Why do individuals invest in the stock market? Why do investment values fluctuate? How could an investment double in value? How could one investment be a good fit for one person but be a bad fit for another? What is the difference between saving and investing? How important are the national securities associations? Stage 3: Plan Learning Experiences Week 1

Topical Questions: How does FINRA regulate investment activities? Why are mutual funds considered investment vehicles? What is the relationship between time and the value of an underlying investment? To what extent does the relationship between risk and return effect fluctuations in the value of an investment? What are the strengths and limitations of using online databases to research securities? Why is it important to use a brokerdealer when purchasing stocks?

Day 1: Pre-Test. In preparation for this unit, students will be given a pre-assessment to gauge their understanding of investments. The test consists of 25 multiple choice questions in five different areas that the unit focuses on. The pre-assessment contains 5 questions each from the following areas: investment vocabulary, time value of money, securities associations, investment trending, and securities transactions. Students should be told that the preassessment will have no effect on their grade for the unit and will be used to gauge their knowledge before the unit begins. W, T Introduce the lesson with a question: What is an investment and why should we learn about them? Have a class discussion that includes what students think investing is and why it is important. H, T Day 2: Vocabulary Awareness. The unit has a significant amount of vocabulary. Students will benefit from greater vocabulary awareness in advance of instruction and reinforcement throughout the lessons. Students should complete the Vocabulary Self-Awareness Chart for this unit. Students will choose ten vocabulary words from the vocabulary list and record these words in the first column of the chart. Students will then rate each vocabulary word according to their current understanding in the second, third and fourth column of the chart. During and after instruction students can add and change information from the chart. The goal is to replace all of the check marks and minus signs with a plus sign by the

conclusion of the lesson. W, E, E-2, O Note-taking Guide. A note-taking guide will be introduced and given out to students to facilitate listening during a power point presentation and lecture. The lecture is interactive and allows students to fill out appropriate material on the guide as well as calculate and self-evaluate their progress as they work their way through the guide. The presentation includes slides in the following categories: What is investing?, Rate of Return, Risk versus Return, Investment Tools, Investment Philosophy and Portfolio Diversification, Taxation, Rule of 72, and a Summary/Reflection. E, T, O Day 3: Time Value of Money Magic! This activity serves as a demonstration of the time value of money and is used to help explain to students the difference between simple and compound interest, and how to calculate each. The demonstration starts with a bag of jelly beans that have the eight standard colors of jelly beans: orange, yellow, purple, red, pink, green, white and black. Two clear bowls are used to hold the jelly beans during the demonstration. The jelly beans are color coded and divided into the following numbers. Color 1 = Principal (20), Color 2 = Year 1 (1 jelly bean), Color 3 = Year 5 (3 jelly beans), Color 4 = Year 10 (6 jelly beans), Color 5 = Year 15 (8 jelly beans), Color 6 = Year 20 (11 jelly beans). The chart used corresponds with the following colors: white = 10, orange = 1, purple = 3, yellow = 6, green =, red =11. The demonstration begins when the teacher asks students can money magically grow? The teacher then explains to students that although it is not magic, money can grow on its own if the time value of money is utilized. Ten jelly beans are placed in each container, each one representing money saved at a bank or credit union. The teacher then explains to students that each jelly bean represents $10. This represents a $100 initial savings amount. The teacher then adds one jelly bean of a different color into another bank bowl. The graph is started and the first animation explains that $7 in interest was earned over the first year, so the savings is now worth $107.00. The jelly bean added to the initial savings represents this $7 rounded up. Three jelly beans are added of a different color, then 6 jelly beans are added, then 8, then 11. The demonstration can continue on and on adding more jelly beans to year 50 but 257 jelly beans are needed for the extended demonstration. The students are then asked to reflect on what they have learned and answer the following questions: What would have happened if you had added to the investment every year? What would you have done with $100 instead of save it? Is that purchase worth more than $2,945.70? The final assessment question which should initiate a class discussion is: which is worse spilling the beans or never having them? The class discussion should encompass why it is better to have savings and spend it then to never have started saving. H, E, R, E-2, T Day 4: Risk vs. Return Activity (Performance Task 1: Role the die!). This performance task introduces the concepts of investment risk versus potential return and investment philosophy. This task is outlined in Stage 2. W, H, E, R, E-2 Podcast: Introduction to Investing. This podcast introduces investing from the perspective

of its difference from saving. Students are introduced to the idea that investing involves buying assets. The podcast gives an introduction to risk and helps students ground their experience in the risk vs. return activity in a meaningful way. The relationship of risk and return is examined and discussed. Students should then be asked the following questions: How do saving and investing differ? What is the relationship between risk and return? How is investing still considered purchasing or buying? W, H, E, R, E-2 Day 5: Math Reinforcement Worksheet. The investing math worksheet provides a series of questions that evaluates a students understanding of stock metrics. Calculations include: ROR, TVOM, savings rate, ratios. These word problems help students understand real world examples of setting savings and investment goals. E, R, T Foldables: Active Learning and Review Tool. Students will create a layered, color-coded, graphic organizer regarding the concepts presented in the lesson. The foldable will include information from each of the sections of the presentation. This gives students an opportunity to organize their thoughts and reflect on the major aspects of the unit. Students are instructed to share their foldable with another student and discuss the major take away with them before submitting it for grading. E, R, E-2, T, O Week 2 Day 6: Risky Business. Risk Pyramid and Tolerance Mobile. Students will be given the opportunity to view and discuss the risk pyramid which has the following levels: 1-Financial Security (cash, CDs, savings accounts), 2-Safety & Income (bonds, treasury securities), 3-Growth (blue chip growth stocks, mutual funds), 4-Speculation (options, commodities, junk bonds). Students will have the opportunity to describe each level and will ascertain that low risk = low return and subsequently high risk = high return. The risk pyramid can be tailored to different groups of students depending on the intelligence level of the students involved to include more or less detail about specific risks and investments that would qualify for inclusion in those levels. E, T, O Podcast 5 Investment Tools will be shown. This podcast will give students an introduction to the various types of investment tools. These tools can help students in their pursuit of investments. A discussion should take place after the podcast in order to compare and contrast the types of investment tools introduced in the podcast. Day 7: $500 bills. Students will be given a faux $500 bill and will be asked to invest the money in one of the levels of the risk pyramid. They will have to explain why they invested their money in a particular level. The beauty of this activity is that there is no wrong answer, just inadequate reasoning. Each student will have a different risk tolerance level and will be able to explain why they were risk averse, risk seeking, or somewhere in the middle. This allows

students to reflect on their individual tolerances and is a great spring board for a discussion on calculated risk and stock investing which they will learn in this very lesson. W, H, R, T Investment Tools. Students will then participate in an activity that has them further explore the investment tools they learned about in Day 6 through watching Podcast 5. Students will need to access the internet to find three different products for each investment tool. Websites used will be google investments, yahoo finance, forbes, investopedia, and any other site that is allowed through the internet filter. W, H, E, O Day 8: New York Stock Exchange conceptualization activity. This activity is a hands-on roleplay skit that allows students to understand how the NYSE works to help investors purchase stocks. The skit follows the order from the originating broker to the floor trader who actually purchases the stock from other investors. This gives students a great idea of how the transaction flows and why stock exchanges are necessary to help keep the checks and balances of the system. This is a great activity to help transition into a complex discussion of regulatory bodies and their importance in securities investing. H, E, E-2, T Supply & Demand Activity. Three candy bars are brought into the classroom. One candy bar is very popular and most students would want it. One of the other candy bars is not very popular and most students wouldnt want it. It is then explained to the students that the candy bars represent three different stocks. Each student is given $100 in play money. Students will then be asked which candy bar they want and the number of students that reply will be written on the board. It is then stated that X number of students wanted each candy bar (demand) but that there is only one available (supply). Students are then asked how to solve the dilemma of how to fairly determine who should get each candy bar. Examples of suggestions may include: first come first serve, lottery, money, need, auction, sharing. The students are then told that they are the buyers and the teacher is the seller of the candy bars. The seller would like to receive as much money as possible for the candy bar and therefore is going to auction it off to the highest bidder. Each candy bar is auctioned off and the price is written on the board. The candy bar with the most demand should go for the highest price (students may even pool their money to buy it). A classroom discussion ensues that includes how the candy bar with the most demand went for the highest selling price just like the transactions which occur on the NYSE floor. H, E, T Day 9: Podcast 6: This podcast explores issues related to investing such as: investment philosophy, portfolio diversification, buying & selling investments, taxation, and employeesponsored accounts. This podcast explores topics that have previously been discussed and takes them to an advanced level. Students will need to have a debriefing after the podcast to help them digest the information presented to them. Terminology Challenge. Due to the fact that these units contain large amounts of complex terminology it is crucial during the unit to make sure and review and allow for reflection of

the terminology covered so that students can self-assess and develop their understanding of the complex terms mentioned. The terminology challenge allows students to review in a fun and interactive way. This activity can be adapted for every type of learner. This allows for differentiated instruction in a way that allows every learner to be engaged while giving attention to the specific needs of each individual student participating in the activity. Before class stock market terminology worksheet is cut apart to separate the word from the definition. Each piece of paper is rolled up and placed inside a balloon. During class the balloons are passed out to students until none are remaining. Students will then blow up the balloons and tie them. Each student should get one balloon and the rest are placed in a separate area of the classroom (this allows the teacher to give students specific balloons based on their needs). On GO, students pop their balloons and search for the student with the matching information. Once they find the student with the matching information they both go to the teacher to check their match. If correct, both students receive one point and they must get another balloon and try to find the match again. If incorrect, students return to hunting for their information. When all balloons are gone and every term is defined, points are calculated. R, E-2, T Review Roundup. Key concepts of the unit are discussed in a round-table style discussion. These include: stocks, the relationship between risk and return, the two types of stocks, the different stock classifications, what things to look for when researching a stock (metrics), what each element of a stock quote represents, the three indicators which represent how the stock market is doing overall, how stocks are bought and sold, what the regulatory bodies do and how they regulate the securities industry. R, E-2, T, O Day 10: Assessment. This assessment is designed to be a summative assessment to this portion of the unit. The assessment is written for a higher level of thinking but also includes step questions and reflections that allow access points for various levels of learning. This allows different points of entry for students with various intelligences. E-2, T, O

Week 3

Week 3 focuses heavily on performance tasks and is the real work session behind the unit. In this week students will take the initiative to develop their own portfolio of stocks and track the performance of these stocks in several activities. The week begins with a simulation of starting a company and issuing stock. Day 11: Business or Bust! The students task is to incorporate a business so that its stock can be listed on the New York Stock Exchange. The goal is to be well capitalized and have positive financial indicators so that your stock meets the listing criteria for the NYSE. The articles of incorporation will include this data which will be presented to the class. Each group will form the board of directors of a new corporation. Each group will have to name their company and create a short list of bylaws of incorporation. Students must note what business they are in (sector) as well as any products and services that they sell. Students will formulate and present this information at the next board meeting. The clients are the investors and potential shareholders in the new corporation. Students must work in groups to convince them that the company is well valued and that they have followed the listing criteria and are ready to list the corporation as a publicly traded company on the NYSE. Each group will create a listing package that includes the financials of your corporation and shows the financial stability of the company by having positive P/E ratios, EPS, and beta. The package will be created in order to convince the investors and potential shareholders that the company is ready to be incorporated. Each group will be judged by the rubric presented to them. The presentation should include all aspects of the criteria listed in the rubric and will include feedback given by members of other groups. E, R, E-2, T, O Day 12: Guest Speaker: Representative from Wells Fargo Advisors. A guest speaker will come to the classroom to discuss the concept of investing with the students. This individual is a securities broker and registered financial advisor. Students will use the Guest Speaker Form to develop questions before the speaker has arrived to make sure to engage the speaker with meaningful questions in order to get the most out of the experience of having a guest speaker come to speak. The form includes sections: Before, During, After so that students can have a full view of the information shared by the guest speaker. E, R, E-2, T Written prompt response. Students will respond to the following prompt: Describe three tools to help analyze a stocks investment potential. How do these tools help better understand the metrics involved in evaluating securities? E-2 Days 13 & 14: Virtual Stock Exchange. Students will research and buy securities inside a virtual portfolio. The challenge will be to find ten different securities that they are willing to purchase and monitor. After three weeks they will take the data from the virtual stock exchange to create a three minute presentation about the portfolio they have built on the virtual stock exchange. Students will have a total of $10,000 to invest and will be able to invest any portion of that into each of the stocks. Students will develop a risk profile for each stock that includes the stocks: EPS, P/E ratio, beta, market capitalization, and any other metric they

would like to include. Students are to research stocks using various sources of stock data including, but not limited to: www.finance.google.com, www.finance.yahoo.com, www.wsj.com, www.smartmoney.com, and www.investopedia.com. Students will need to be able to defend their stock picks during their presentation. Students will purchase ten stocks using the $10,000 given to them by the virtual stock exchange. The target audience is any potential client of the student. They are not necessarily selling investments during the presentation, but are selling themselves! Students will be assessed on the ability to choose investments. No one can predict how stocks will perform but they must be able to defend their choices, using the sources of investment information, to encourage investors to use the student as their investment advisor. The challenge involves dealing with thousands of possible stocks. Students will need to be careful about buying just the big brands and focus on finding stocks that are undervalued, growing rapidly, or producing steady dividend returns. They must use the tools at your disposal to find the best investments. Students will create a three minute presentation using the presentation software/materials of their choice in order to convince potential investors to use their services as a financial advisor. The presentation will include information about why the stocks were chosen, their metric data (P/E, EPS, beta, valuation), how they performed over the three week period, as well as the sources of information. Care will need to be taken in selecting stocks as students will need to defend choices with metric data including exchange information as this can be an important factor in the event your investments perform poorly over the three week period. The work will be judged by the rubric presented to them at the beginning of the assignment. The presentation must meet the technical standards located in the rubric. The student will ultimately be graded on their ability to defend investment choices, not the performance of those investments, although that data is also an important part of the presentation. Facets: E, R, E-2, T, O Day 15: Conclusion. The unit is concluded with a student self-evaluation that details the students risk profile and investment style. Each student will develop a model portfolio that does not include actual stocks but the classifications and metrics that would be present in the perfect portfolio of the student. E-2, T Notes to the Instructor

After completion of this unit, students will have a firm understanding of investment principles. The unit was developed in a way that allows students to have interactive and hands on instruction. The very nature of the activities helps vary the instruction and assessment to accommodate all levels of learners. After each activity letter codes corresponding to the WHERETO elements were given to show which element that particular activity corresponded to.