The Stock Market

 

UNIT PLAN

 

 

 

 

Jennifer Bjorngaard

Jill Jackson

Holly Kunick

Kati Loersch

Jennifer Reynolds

Sara Yaden

Introduction

 

Topic: The Stock Market

 

Grade level: 6th - 8th

 

Length of time with students: 45 minutes to an hour

 

Materials & resources:

 

Goals:  By learning about the stock market, students will be able to pick out reliable companies to invest their money in someday.  The lessons are designed to introduce students to the basics of how the stock market works through the integration of economics, business, language arts, critical thinking, and mathematics. Students will also be able to understand how to read stock symbols, charts and terminology.  In short, students will ideally leave the class understanding basic knowledge about the stock market and how investing creates wealth and financial security for all. 

 

Standards & Benchmarks:

Language Arts

            Standard 1, 2, and 3 - Meaning and Communication

            Standard 4 - Language

            Standard 6 – Voice

            Standard 7 – Skills and Processes

            Standard 11 – Inquiry and Research

            Standard 12 – Critical Standards

Social Studies

            Standard III.2 – Ideals for American Democracy

            Standard IV.1 – Individual Household Choices

            Standard IV.2 – Business Choices

            Standard IV.4 – Economic Systems

            Standard IV.5 – Trade

            Standard V.1 – Information Processing

            Standard V.2 – Conducting Investigations

            Standard VI.2 – Group Discussion

Mathematics

            Standard III.1 – Collection, Organization, and Presentation of Data

            Standard III.2 – Description and Interpretation

            Standard III.3 – Inference and Prediction

            Standard V.1 – Operations and their Properties

            Standard V.2 – Algebraic and Analytic Thinking

 

Assumed Skills: Students are expected to know basic knowledge about the economy.  They are also expected to know how to use computers and the Internet to research information.

 

Skills to teach: Students will be taught how to achieve economic security by learning the following skills…

 

The 5 Senses:

            SightStudents will use their sense of sight by going on their field trip                             and researching on the Internet.  They will also use sight when                              constructing their product for their final project.

            HearingStudents will listen to a voice recording of Peter Lynch reading                                     “Chapter 1: The Miracle of St. Agnes” in his book Beating the                              Street.  They will also use sound when creating a jingle for their                            company during the final project.

            SmellStudents will be able to use the sense of smell when creating a                         product that is food or some sort of fragrance for their final project.

            TasteStudents will be able to taste the food made by a group for the                              final project. 

            TouchStudents will be able to use their sense of touch when they are                           creating their company’s product for their final project.

 

Social Studies Disciplines: Economics, History and Business

Core Democratic Value: LIBERTY: This includes personal freedom,       political freedom and economic freedom.

·      Economic Freedom – the right to buy, sell and trade private property and the right to employment without the government interfering.

 

Academic Disciplines: Mathematics, Language Arts and Critical Thinking

 

Technology used: Students will use computers and the Internet to research the history of different companies and to compare and contrast different stock information.

 

Field Trip: Students will be taking a field trip to the Daimler Chrysler             Headquarters in Detroit where the students will basically be given the             same tour as a potential investor would be given.

 

Controversy: It used to be that people could only trade on the stock market through brokers. Now, with online trading, people can do it themselves for less, but they lose some of the benefits of trading through a broker.  Which is better? Students will look at both sides of the issue and decide for themselves.

 

 

 

 

 

 

 

 

UNIT SCHEDULE

Week 1

1

2

3

4

5

Welcome to Wall Street

 

Objectives: Students will demonstrate their understanding of basic terms and ideas associated with the stock market.

 

Piggy Bank Stocks

 

Objectives: Students will determine the overall performance of the stock market during their lifetime and make predictions about future performance.

 

Stocks are Everywhere!

Objectives:  In this lesson, students will turn their knowledge of everyday products into a useful way of choosing stocks.

 

Week 2

1

2

3

4

5

 

Find that symbol

 

Objectives: SWBAT find stock symbols by company, industry, and country.

Finding Stock Quotes

 

Objectives: SWBAT search the internet & the Wall Street Journal to find stock quotes/

 

Begin using Value Line

 

Week 3

1

2

3

4

5

Do Your Homework

 

Objectives: Students will understand how to properly research a stock before investing

Continue

Research

Virtual Stock Exchange

Begins today!

How does news influence stock prices?

 

Objectives: Students will

understand that news & business events can effect stock prices.

Research & Meet with Group Day

 

Week 4:

1

2

3

4

5

Stock Market Field Trip

To: Daimler Chrysler in Detroit

Research & Meet with Group Day

Controversy:

Broker vs. Going Solo

Objectives: Students will decide whether it’s better to buy stocks through a broker or do it  their own.

Catch up day

Research & Meet with Group Day

 

Week 5:

1

2

3

4

5

Final Project:

Make Your Own Company

Objectives: SWBAT use the information they learned from previous lessons to create their own company

Turn in portfolios & work on Final Project

Work on Final Project

Work on Final Project

Work on Final Project

 

Week 6: Company presentations on Day 1 and that’s a wrap!

 

 

 


The Bulletin Board

Welcome to Wall Street

 

Grade level: 6 - 8

 

Subjects: Economics, Language Arts

 

Time period: Two 45 – 60 minute class periods

 

Objectives: Students will demonstrate their understanding of basic terms and                  ideas associated with the stock market.

 

Rationale:

S.S. Standard IV.1 – Individual Household Choices

S.S. Standard IV.2 – Business Choices

S.S. Standard V.1 – Information Processing

 

Materials:

Pencils

Edited HowStuffWorks.com Article “How Stocks and the Stock Market Work”

Accompanying Worksheet

 

Procedure:

Opener: Begin with a question: “How do we get money?”  The students will offer up answers, most of which will involve some type of work. Present this scenario: “Let’s say you work – you baby-sit, have a paper route, etc. – and you save up $100.” Ask them what they can buy with $100 to keep it real for them. “So, you could just spend the $100 on “x” and what have you got? An object worth $100.”  Ask them if they could sell that object to someone else for $100 – most might say yes.  Ask if they could see that object to someone in a year for $100. Fewer will say yes. Ask the same question for 5 years, and if anyone says yes, explain why it wouldn’t be (object is used, someone new and better might be available by then, etc.) 

            Then, ask this question: “What if you could take that $100 and turn it into $200?” Ask what they could buy with that. Next, ask about $400 and what they could do with that.  Finally, get to the real question: “How can you make your money grow like that? Is it possible?”  Field a few answers before writing “The Stock Market” in big letters on the board.

-   Ask the students what they know about the stock market. Write their answers around “The Stock Market” that is written on the board in a web fashion.

-   Hand out copies of the edited HowStuffWorks article along with a worksheet. Students should be directed to read the article and answer the questions on the worksheet.

 

Assessment:

Terms and ideas presented in the article and reflected in the answers should be discussed in the next class period to assure that everyone has a basic understanding of what the stock market is about.

 

 

 

Name:  ________________________________­_      Date: _______________________

 

 

How Stocks and the Stock Market Work

 

1.    How does a company figure out its profit?

 

 

2.    What is a company’s book value?

 

 

3.    Why would someone want to buy shares of a business?

 

 

4.    A business has 20 shareholders (people who own shares of the business) and the business’s profit for a given year was $100,000.  What is the amount of the dividend each shareholder receives?

 

 

 

5.    How is the stock market like a supermarket?

 

 

 

6.    What are the three major stock exchanges in the U.S.?

 

 

 

7.    What is a stock broker?

 

 

 

8.    What are OTC stocks? What does OTC stand for?

Piggy Bank Stocks

 

Grade level: 6 – 8

 

Time period: Two 45 – 60 class periods

 

Subjects: Economics, business, language arts, math

 

Objectives: SWBAT -

 

Rationale: 

            SOC. IV. 3. 2 - Different forms of economic measurement.

 

Materials:

CNNfyi article, "Piggy bank stocks"
Internet access
Graph paper

 

Procedures:

1. Ask students about their knowledge of the stock market. Find out if any students follow any stocks, and why or why not.

2. Read the CNNfyi article "Piggy bank stocks." Then ask students:

 

(The next part of the lesson will probably carry over into the next class period)

3. Identify the year in which most of your students were born. Distribute graph paper and pencils. Divide the class into small groups. Assign each the task of finding out what the closing number was for the Dow Jones industrial average on the last day of various specific years since the students were born through 1999. This will most likely be done using the internet and visiting a finance web site such as yahoo! finance (http://finance.yahoo.com)

4. Call out each year and have each group reveal its number. Write that number, along with the corresponding year, on the board.

5. Have each group use all the data to prepare a graph illustrating the Dow's performance over all the years studied. If possible, have students calculate the percentage change (up or down) for each year.

Assessment:

Have each student write a short essay reflecting on what they found while researching their given year and constructing their graphs.  In the same essay, they can offer their predictions for the Dow's performance five years from now.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stocks are Everywhere!

Grade Level: 5 - 8

Subjects: Economics, business, language arts, social studies

Time Period: Two 45 – 60 minute class periods

Materials: Internet access, library, and daily products at home or stores

Objectives:  In this lesson, students will turn their knowledge of everyday                                                products into a useful way of choosing stocks.

 

Rationale:

Social Studies/Strand IV/Content Standard 4/Benchmark 1
Identify examples of markets they experience in daily life.

 

Background: When people choose stocks, they usually want to buy the popular brand names.  However, if they look for companies such as Pizza Hut, Oreo cookies, or Kleenex, they won’t be able to find them.  These products are not listed in the newspaper because they are not their own company and are, instead, part of a larger company, also known as the parent company.  For example, Tricon Restaurants International owns Pizza Hut, Nabisco owns Oreo cookies, and Kimberly-Clark Corporation owns Kleenex.

Once students find the parent company of a product, they can buy shares of stock of the larger company and indirectly own the product they like or use daily.  However, some companies that make popular items are not public and, therefore, no stock can be bought.  Some larger companies such as Sony, McDonald’s, and Microsoft are already their own company.  In this exercise, students will gain more knowledge of the products and companies in which they have had firsthand knowledge.

Activities:

  1. Group students individually or in groups of 3 to 5.
      
  2. Have the students list about ten products they use daily or have first hand knowledge of, but are not obviously tied to the name of the company, such as IBM, Yahoo, Starbucks, or AT&T. 
  3. Have the students try to find the parent companies of the products listed.  Here are some suggested methods:
  4. Once students find the parent companies, have the students record them and tell how the companies were found.  Some companies will be harder to find because another company may yet own the company that makes the product.  For example, McNeil Consumer Products Company makes Tylenol, but Johnson & Johnson owns McNeil Consumer Products. 
  5. After students find the parent companies, they can research the company by looking at the company Web site or a finance web site to decide whether it will be a good buy or not.  

Next:

·       Have students list the large companies based in the city where their school is located.  Check the business section of the local newspaper for local companies with stock offerings.

·       Have students interview parents, neighbors, relatives or friends who may work for big companies with stock offerings.  Possibly invite them as a guest speaker for the class.

Here are some suggested products and their parent companies:

Product Name  

Parent Company  

Web site  

iMac

Apple Computer

http://www.apple.com

Toy Story 2

Pixar

http://www.pixar.com

PlayStation 2

Sony

http://www.sony.com

Windows 2000

Microsoft

http://microsoft.com

PhotoShop

Adobe

http://adobe.com

ESPN

Disney

http://espn.com

CNBC

General Electric

http://cnbc.com

CNN

Time Warner

http://cnn.com

Navigator

America Online

http://aol.com

KFC

Tricon

http://kfc.com

Minute Maid

Coca-Cola

http://minutemaid.com

Duracell

Gillette

http://gillette.com

Cheerios

General Mills

http://cheerios.com

Cadillac

General Motor

http://gm.com

Pokemon

Nintendo

http://pokemon.com

Crest

Procter & Gamble

http://pg.com

747

Boeing

http://boeing.com

Pentium

Intel

http://intel.com

Athlon

AMD

http://amd.com

Newsweek

Washington Post

http://newsweek.com

The Wall Street Journal

Dow Jones

http://wsj.com

USA Today

The Gannett Co.

http://usatoday.com

 

Finally, students will choose 10 stocks based on their firsthand knowledge or through their friends or relatives about these companies. Then, students should visit the Web site of these companies to learn more about the business of the company.

 

Company Name

Symbol

Industry

Earnings Growth (%)

Reasons for picking the stock

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5

 

 

 

 

 

It is important that students choose one company in each industry for diversification, meaning not putting all eggs in one basket.

 

Assessment:

Look over the charts that the students filled out to see that they found the necessary information and stayed on task. A  ü+, ü, ü-  type of evaluation would suffice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Find That Symbol

Grade Level: K-12 and up

Subjects: Economics, business, language arts, social studies

Time Period: One class period with homework

Resources: Internet access, paper, pencils

Rationale: Standard IV.4 – Understanding Economic Systems

Objectives: In this lesson, using the Internet students will learn and practice finding stock symbols by company, industry, and country. Stock symbols are necessary to find company information such as stock charts, news, and financial data on the Internet.

Background: The stock symbol, a unique name assigned by stock exchanges worldwide, is used to identify a company’s stock. Students should not confuse the stock symbol with the abbreviated name usually found in the financial section of most newspapers.  Here is a sample of the stock symbol for various corporations worldwide:  

Company Name  

Stock Symbol  

Stock Market  

Microsoft

MSFT

Nasdaq, US

Hewlett Packard

HWP

NYSE, US

General Electric

GE

NYSE, US

Citigroup

C

NYSE, US

MPhase Technologies

XDSL.OB

OTC, US

Fidelity Magellan

FMAGX

Mutual Funds, US

Bouygues

1250.PA

Paris

Siemens AG

723610.F

Frankfurt

Vodafone

VOD.L

London

Laidlaw

LDM.TO

Toronto

Telebras

TELB4.SA

Brazil

Telstra

TLS.AX

Australia

TelMex

TELMEXL.MX

Mexico

Golden Harvest

1132.HK

Hong Kong

Nintendo

7974

Japan

 

 

Procedure:

  1. Students will find the stock symbol of companies that they researched in “Stocks are Everywhere” using Yahoo! Finance (http://finance.yahoo.com) under symbol lookup or alphabetical listing.

Company Name  

Symbol  

Market  

Agilent

 

US

Venator Group

 

US

McDonald’s

 

US

Pixel

 

US

Coca-Cola

 

US

Disney

 

US

Gillette

 

US

Tricon

 

US

Adobe

 

US

  1. Students should find the stock symbols by industry under Research in Yahoo! Finance.
  2. For each industry, have the students find the top three companies and their symbols.

Industry: Internet software  

Company Name

Symbol

#1

 

#2

 

#3

 

 

Industry: Fiber Optics

Company Name

Symbol

#1

 

#2

 

#3

 

 

Industry: Telecommunications Equipment

Company Name

Symbol

#1

 

#2

 

#3

 

 

Industry: Telecommunications Wireless

Company Name

Symbol

#1

 

#2

 

#3

 

 

Industry: Computer Network

Company Name

Symbol

#1

 

#2

 

#3

 

Use Yahoo! Finance and look under  World Finance to find the following stock symbols by country. 

Country  

Company Name  

Symbol

Australia

News Corp

 

Australia

Telstra Corp

 

Canada

Dominion Bank

 

Canada

Kasten Chase Applied  Research

 

France

PEUGEOT

 

Germany

VOLKSWAGEN

 

China

QINGDAO SODA

 

Hong Kong

HONGKONG.COM

 

Japan

Sony (6758)

 

Mexico

TLEVISA CPO

 

Singapore

DBS LAND LTD

 

United Kingdom

British Telecom PLC

 

United Kingdom

Cable and Wireless PLC

 

United Kingdom

British Aerospace PLC

 

 

 

Assessment:

Look over the charts that the students filled out to see that they found the necessary information and stayed on task. A  ü+, ü, ü-  type of evaluation would suffice.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finding Stock Quotes

 

Subject:  Economics, Language Arts

 

Grade:  6 - 7

 

Time:  Two 45 – 60 minute class periods

 

Goal:  Students will use different means of looking up stock quotes of various             companies.

 

Objective: 

²    The students will search the internet and find stock quotes on certain

companies.

²    They will find stock quotes in the Wall street journal on the same companies they found on the Internet.

 

Rationale:

²    MI-S.K-12.01.01: All students will ask questions that help them learn about the world; design and conduct investigations using appropriate methodology and technology; learn from books and other sources of information; communicate their findings using appropriate technology; and reconstruct previously learned knowledge. (Constructing New Scientific Knowledge)

²    MI-SS.4-6.04.04.01 * Explain how prices are determined in a market economy and how they serve as a means of allocating resources.

 

Materials: 

²    Wall Street Journal

²    Internet access

²    Other Newspapers with stock quotes

²    Question sheet for the students to answer.

 

Procedure:

1.    As a class review how to search for topics on the Internet or in the Wall Street Journal (if needed).

2.    Have the students choose their companies to research.

3.    Students research and collect their data on the companies they chose. (http://finance.yahoo.com/)

4.    Fill in the question sheet for their company.

5.    As a closure for the lesson have them report their findings according to their research.

 

Assessment:

Students will be assessed on how well they work on the assignment and whether or not they complete or try to complete the work they have been given.

 

Adaptations:

 

For the students who have special needs it might be helpful for them to work with a partner. You could also simplify the questions or how much they have to research. 

 

 


Name:  __________________________________­______       Date: _________________________

 

 

 

Stock Market Quotes

 

Company Name: ______________________________________________________

 

 

1.              What is the name of the stock exchange on which your company is presently trading?

 

 

 

2.              How much would students have to pay for one share of the company if they bought the stock at this moment?

 

 

 

3.              What was yesterday’s closing price for your company?

 

 

 

4.              How many shares of your company were traded since the market was open this morning?

 

 

 

5.              How many shares of your company are traded daily on average?

 

 

 

6.              How much did your company earn per share in the last year?

 

 

 

7.              Does your company pay a dividend?

 

 

 

8.              If students bought 10 shares of your company at the lowest price of the year and sold it at the highest price for the year, how much money would they make?

 

 

9.              If students bought 100 shares of the company at the current price but missed the chance to buy the shares at the lowest price for the day, how much more money would they have to pay?

Value Line

 

Before the students can get into “buying” stocks, they need to research the companies they have in mind. Knowing how to read stock quotes is a good start, but they really should know to look into the company’s history. They can do this by using Value Line surveys.  These one-page surveys have all sorts of information on every company you can think of for the past 10 years – how much money they’ve made, lost, and other financial statistics that are updated on a regular basis.  There are charts that have kept track of their progress as well as a description of the company, what they own, how many people they employ, and how to contact them.

The books full of these surveys can be found at the circulation desk in any library, so they should be available in the school’s library.  If they are not, perhaps you can make a request that you’re library have them before you start this unit. It’s not advisable to take a field trip to a local library to get them because you will want the kids to always have access to these if they should want to research another stock. The other option, assuming there is internet access in the classroom, would be to go to www.Valueline.com and download a 60-day free trial program that make the Value Line surveys available to you online.

Once the student knows which company they’re looking for, it’s very easy to look it up on Value Line.  There is a large index that can be used to find which page the company’s Value Line survey. When they find it, simply make a photocopy of it and you’re all set. With the online version, you would just print it up or, to save ink and paper, save it on a 3 ½ floppy. Students should be instructed to look for about 5 or 6 companies – there’s no need to overdo it. 

 

 

When the students get these, they are ready to move on to the next lesson….

 

 

 

 

 

 

 

 

 

 

 

Do Your Homework

 

Grade level: 5 – 8

 

Subjects: Economics, Math, Critical Thinking, Language Arts

 

Time period: One 45 – 60 minute class period to teach the process

                        This activity will be repeated in other class periods as needed

 

Objectives:   SWBAT pick good stocks to put into their portfolio by doing some                           research first; they will understand how to properly research a stock

 

Rationale:     SOC. IV. 4. Benchmark 1 – Markets kids experience

SOC. IV. 4. Benchmark 3 – The impact of business decisions
           

Materials:     Value Line sheets, Stock Research Worksheets, calculator, pencils                                                          

Procedure:  

 Opener: The teacher compares picking companies for their portfolio to picking players for a winning baseball team. You’re not going to just pick someone because you saw them hit a ball good once or twice.  You’d want to look at things like their batting averages, what teams they’ve played for, and how long they’ve been playing. You look into their history. You have to do the same in picking companies for a good portfolio.

-       Pass out calculators and ask students to get out a pencil to prepare for the pending activity.

-       Hand out the Stock Research Worksheet to each student along with a Value Line Survey on one company so that each student has the same one. This will be the sample so the students can learn altogether how to fill it out.

-       Go through the worksheet with the students step by step, making sure everyone is looking at the right information on the Value Line sheet.

-       For the math portion on the last page, the average growth rate you’re shooting for is 10% – 15%. 

-       Once the worksheet is completed, if there are no questions or confusion about anything, let students complete a worksheet for each of their companies.

-       When they finish each one, students should be asked to write on a piece of paper a short paragraph answering this question: “Is this a good company to invest in? Why or why not?”

 

Assessment:

Look over the students’ work, which would include the worksheets and the paragraphs, to see if they understood what was taught. If there a lot of mistakes, go over it again with another Value Line Survey and correct any misconceptions.

 

 

 

Stock Research Worksheet

 

 

Company name: ­­­­­­­­­­­­­_____________________________________________

 

Symbol: _____________         Current price/share: ________________

 

Which Market (circle one)?      NYSE         NASDAQ             AMEX

 

 

1.     What does the company do / What do they make?  Write a brief description.

 

 

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Option: Draw a picture of what the company does / makes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2.     Describe the quality of the products or services the company offers.

Excellent, Good, Fair, or Poor?  How do you know?

 

 

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3.     Does the company have room to grow?  Can it expand? How or why?

 

 

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4.     Does the company have any competition right now? What about in the future? Are there any existing companies that could challenge this one?

 

 

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5.     Growth Rate for the past 5 years.

Growth rate:   current year sales

-      previous year sales   

                  sales growth for that year

 

Divide that by the current year’s sales to get a percent

 

Year                 Sales Growth

­­_____              ___________

 

_____              ___________

 

_____              ___________                                      Add these 5 numbers and

                                                                                    divide by 5 to get an

_____              ___________                                      average growth rate

 

_____              ___________                                      Average: ________________

 

 

 

 

 

 

6.     What is the company’s financial position? Good or bad?

Note: Being in debt is not a good thing

Total Assets – Total Debt = Financial Position

 

 

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The Virtual Stock Exchange

 

Time period: One class period to teach it

                        It will be used again during multiple class periods

 

After doing their research, students should then be either put into groups of 3-4 members or allowed to choose their own. In these groups, they will compare their research worksheets and be asked to answer the following question:

 

-       Of all the companies researched in the group, which ones seem to be the best choices?

 

Then, break the news to them that the groups they’re will be their own “investment clubs” for the next few weeks. They will pick stocks together, keep track of their portfolio, and decide together which stocks to buy and which to sell. They should pick a name for their group, and when they do, they can open an account on The Virtual Stock Exchange (http://www.virtualstockexchange.com).

           

The Virtual Stock Exchange is a website that, after you register for free, you get an “account” of $500,000 to “invest” in the stock market. It works very much like an online trader, only it’s done with fake money.  You can only buy and sell during market hours, and it keeps track of how much you have invested in a given company and follows the market’s numbers, so it seems very real. 

 

Each of these “investment clubs” would have an account on this website and only the members of that club would know the password to their account. The groups would meet twice a week for 20 minutes of the class period to discuss the status of their portfolio, and students could always research new companies any time they wanted to bring up to their group. Stock Research Worksheets would always be available to them.

 

If the classroom does not have internet access, students could go somewhere that does, such as the library. If that isn’t a possibility, then they could just do it the old-fashioned way and look at the newspaper everyday. 

 

At the end of a given amount of time, the groups will turn in their portfolios and a grand prize can be awarded for the portfolio that made the most money.  There can be other prizes offered as well if you don’t want to leave other students out, such as: The Most Diverse Portfolio, The Most Interesting Portfolio, etc.  There could even be two grand prizes for the best and worst portfolio, so at least if a group went “broke,” it isn’t all bad.

 

 

 

 

 

 

How Does News Influence Stock Prices?

Grade Level: 6 and up                                            Time Period: One class period

Subjects: Economics, business, language arts, and social studies

Resources: Internet access and/or newspapers

Rationale: Social Studies/Strand IV/Content Standard 4/Benchmark 1
            Explain how prices are determined in a market economy

Objectives: Students will learn that economic news and business events can change the price of a stock. They will see that the unexpected events that benefit or harm the company will in turn move the company’s stock price up or down.  Certain internal and external factors will affect share prices.  By learning about the relationship between business events and share prices, students will be able to form a strategy in buying and selling stocks for the classroom stock game and final project.

Background: A number of factors influence stock prices.

Some internal factors include:

·       Earnings growth

·       Sales growth

·       Product release

·       Leadership changes

·       Lawsuits pending

Also, some external factors change the share prices:

·       New market competition

·       Economic news such as interest rates and inflation

·       Government policy changes

Activities:

  1. Teachers will select news from newspapers or Web sites like Yahoo!, MSN, CBS Market Watch, and the Wall Street Journal interactive edition.
      
  2. Next, the teacher will read the business news concerning a specific company or the general economy to the students.
  3. Then, the teacher will ask questions about how these events would influence the share price of the company or the stock market in general.  There will be four typical answers:

·       Share prices will likely increase

·       Share prices will likely decrease

·       Share prices will likely be unchanged

·       Not enough information to determine

 

Assessment:

After the questions have been read and the students have answered all the questions, there will be a discussion of each answer and the reasoning behind it.

 

 

 

 

 

 

 

 

 

Name:  __________________________________­__            Date: _________________________

 

 

How Does News Influence Stock Prices?

 

1.     After the meeting of the Federal Reserve’s open market committee, Chairman Alan Greenspan declared an increase of 0.25% in interest rates. Share prices of the real estate companies and home builders will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

2.     U.S. productivity sees 6.4% increase, the largest gain since 1992. Share prices of General Electric, IBM, and 3M will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

3.     Oil prices hit $34 per barrel, the highest since the Gulf War. Share prices of United, South West, and Delta airlines will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

4.     Judge Jackson rules that Microsoft has a monopoly on PC operating systems.  Share price of Microsoft will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

5.     AMD begins shipping a microprocessor that achieved an industry milestone with a clock speed of one gigahertz, processing one billion bits of information a second, the computer industry's equivalent of breaking the sound barrier.  Share price of AMD will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

6.     Because businesses no longer fear Y2K, PC shipments are expected to rise 20% from the first quarter a year ago. Share prices of Dell, Intel, and Compaq will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine                     

7.     Al Gore claims he invented the Internet.  He is leading the polls and will most likely become the first president of the new millennium. Share prices of Yahoo!, AOL, and eBay will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

8.     Yahoo!’s “Surprise Earnings” news reported that Procter & Gamble, maker of Crest toothpaste and others, projected that earnings will be 21% below the Wall Street experts’ (analysts) estimate due to higher expenses.  Share price of P & G will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

9.     AOL surprisingly announces the mega merger with media giant Time Warner, signifying the growing power of Internet companies.  Share prices of Yahoo! and Earthlink will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

10.  The co-chairman of Citigroup, John Reed, announces his retirement.  The successor, Sandy Weill, will become the sole CEO.  Robert Rubin, former Secretary of Treasury, will likely take over the top job in 2 years when Weill retires.  Wall Street experts think Reed’s retirement is a positive to the company.  Share price of Citigroup will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

11.  President Clinton announced that U.S. and Britain agreed to openly share data from a project to map human genes.  Shares prices of the biotech stocks will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

12.  Yahoo! held talks with eBay about various forms of partnership and a possible merger.  Share price of eBay will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

13.  Sears and America Online unveiled a wide-ranging strategic alliance that includes cross-marketing and promotional agreements.  Share price of Sears will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

14.  The strike of Boeing’s engineering and technical workers has delayed some testing and production of the F-22 fighter.  Share price of Boeing will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

15.  Intergraph's antitrust suit against Intel was dismissed. Share price of Intergraph will likely:

·       increase

·       decrease

·       unchanged

·       can’t determine

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Answers to “How Does News Influence Stock Prices?”

  1. Share prices will likely decrease.  If the Federal Reserve declares an increase in interest rates, mortgage payments will increase.  This increase will cause housing to be less affordable, therefore hurting share prices of real estate companies.
  1. Share prices will likely increase.  Companies such as General Electric, IBM, and 3M will be more profitable as a result of higher productivity.  The companies will be able to make more while having a lower cost to produce the product.
  1. Share prices will likely decrease.  The airline companies will have to pay a higher fuel cost.  They will not be able to pass along the increased cost to consumers or raise the cost because of the increase in fuel prices.
  1. Share price will likely decrease.  Because the judge declares a monopoly on Microsoft, the government will likely put penalties on Microsoft.  Also, hundreds of private pending lawsuits are arising against Microsoft.
  1. Share price will likely increase.  AMD beat industry leader Intel for the fastest microprocessor and will also take market shares away from Intel.
  1. Share prices will likely increase.  Because of increased shipments, companies will have an increase in sales and, therefore, profits.
  1. Share prices will likely increase.  If Al Gore becomes the next president, he will likely have policies favorable to Internet businesses.
  1. Share price will likely decrease.  Changes in share prices are greatly tied to earnings.  In addition to P & G’s reported poor earnings, Wall Street doesn’t like downside surprise earnings.
  1. Not enough information to determine.  The announcement of the merger is too early to determine whether it will have any impact on Internet companies like Yahoo and Earthlink.
  1. Share price will likely be unchanged.  All three management are well-respected industry leaders.  The retirement of any one will not affect the operation of the company because all are competent to take over the job without any problems.
  1. Share prices will likely decrease.  The private sector will be competing with the huge amount of resources and research as a result of the government-funded labs.
  1. Share price will likely increase.  eBay will likely be the target that Yahoo will acquire.
  1. Share price will likely increase.  The alliance will likely cause an increase in Sears’ sales because of the exposure on the Internet to the 22 million AOL users.
  1. Share price will likely decrease.    The strike will likely affect Boeing’s sales and delivery of products to the government.
  1.  Share price will likely be unchanged.  Intergraph will not be able to get any compensation from Intel.

 

 

 

 

 

 

 

Stock Market Field Trip

 

We will be going to: Daimler Chrysler

                                       2101 Conner Avenue

                                       Detroit, MI  48215

                                       (313) 956-7580

 

 

We will meet in the conference room on the first floor with Mr. Kunick.  He will tell us how Daimler Chrysler is doing financially and what products are doing well.  Mr. Kunick will also tell us why we should invest in Daimler Chrysler stock.  After the meeting we will go on a plant tour of approximately ½ hour.  We will see in this plant how they make Jeep Cherokees.  After the plant tour we will meet back in the conference room and Mr. Kunick will give each student a miniature toy Jeep Cherokee.

 

Before the field trip: Students will know about the stock market, how to read stock quotes and students will already have reviewed off the website Daimler Chrysler stocks.

After the field trip: Students will be asked if they would or would not invest in Daimler Chrysler stock, and write a short paper telling why or why not, based on what they have learned about the economy, companies, and the stock market.

 

 

 

 

 

 

 

 

 

Controversy:

A “Broker” Handles Your Money?!?

 

Grade level: 6 - 8                             Time period: One 45 – 60 class period

 

Materials: Pencil, paper

 

Subjects: Economics, Language Arts, Critical Thinking

 

Objective(s): Students will take positive and negative information and decide                 whether it’s better to buy stocks through a broker or do it on their own.

 

Rationale: Soc St-IV. 1. 3. – Analyze the reliability of information when making                        economic decisions.

 

Background: Up until the mid-nineties, people really couldn’t buy and sell on the stock market without going through a broker.  Then, with the innovation of online trading through web sites such as Ameritrade and Scottrade, people can now trade on the stock market on their own for a lot less money, but they have to go without the services and benefits of going through a broker, so which is better?

 

Procedure:

Opener: The teacher asks the class, “What’s another way of saying you have no money?” Ideally, someone will say the word, “broke.”  Then ask, “Does anyone remember what a broker is?”  If they’ve forgotten, explain that a broker is someone who works at an investment firm and handles people’s money. Some raised eyebrows and quizzical looks will probably result.

-   Begin by putting two columns up on the board, one labeled “pros” and the other “cons” (or go with “good” and “bad” if they’re not familiar with the other).

-   Explain that one column is for good reasons to go through a broker, and the other is for good reasons not use a broker.

-   Since the kids will most likely not know about what’s good or bad about using a broker, the teacher should simply list the reasons one by one, perhaps alternating back and forth between the two columns to give an even perspective. It will look something like this:

 

Pros:

-         Brokers have years of education and experience in making stock trade decisions

 

-         Brokers act as advisors to make you the most money on your portfolio

 

-         A broker may have more knowledge of which companies are doing well & which are not

Cons:

-    It costs $25 - $150 per trade with a broker; it’s only $5 - $10 online

 

-    Brokers sometimes get commission from certain companies for telling their clients to invest in them.

 

-    YOU have access to the same information: quotes, stats, everything!

-   Discuss the “pros “ and “cons” as you’re writing them up on the board, and end by identifying what they both have in common – neither is a sure thing.

-   Students will then be asked to compose a short essay answering this question: Is it better to buy and sell on the stock market through a broker or do it on my own online? Why?

 

Assessment: The students’ essays will be checked for three things: whether                             they definitely chose one side, adequately explained their                                         reasoning, and whether they understood what was taught.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Final Project: Make Your Own Company

 

Grade Level: 6-8

 

Time Period:  Five to six 45-60 minutes class periods

 

Objectives:  In this lesson, students will use the information they learned from previous lessons to create their own company, so that when asked, students will be able to sell stock to other classes learning about the stock market in their school.

 

Rationale: 

Short term:  Learning how to build a company and entice potential buyers will help students understand how the American economic market system works.

Long term:  Learning the up’s and down’s of the stock market will help aide students in the future when they are ready to invest their money in a stock or in our economy.

 

Michigan Content Standards

Social Studies

Strand IV – Economic Perspective

Standard IV.1 – Individual and Household Choices

Standard IV.2 – Business Choices

Standard IV.3 – Role of Government

Standard IV.4 – Economic Systems

Standard IV.5 – Trade

Strand V – Inquiry

Standard V.1 – Information Processing

Standard V.2 – Conducting Investigations

Standard VI.2 – Group Discussions

 

Materials:

Value line sheets (without a company name)

Pencils

Newspapers

Magazines

Pencils

Company cards:

Building material for group’s product

Final project rubric

 

Anticipatory Set:

Motivation:  I will increase enthusiasm by telling students they will have a chance to make their own company and see how the stock market works by selling stock for their company.

 

Restate Objective:  I will begin the introduction to this final project by reviewing what has been learned about the economy and stock market with students.   Students will then be able to sell stock to other students by creating a company of common interest from the company card and value line their group randomly picked.

 

Procedure:

Day 1 – Monday (Opener):

  1. Discuss as a whole class what has been learned over the past couple of weeks.
  2. Hand out final project rubric.
  3. Review what is expected of each student to complete project.
  4. Break students up into groups of 4 to 5.
  5. Have each group randomly pick a company card and value line sheet.
  6. Allow students to trade company cards, if necessary.
  7. Allow groups to brainstorm and discuss ideas.

Day 2 - Tuesday:

  1. Allow students to continue to brainstorm using ideas from magazines, newspapers, etc…
  2. Have each group submit at least three ideas they have for their company.
  3. I will help groups that did not submit any ideas.

Day 3 - Wednesday:

  1. Groups are expected to make a final decision about what company they want to create.
  2. Each group will submit their company’s name, their company’s product, and a drawing of their company’s product (if feasible).
  3. Groups will discuss the supplies they may need to make their company’s product.

Day 4 - Thursday and Day 5 - Friday:

1.    Groups will begin working on all the criteria listed in the final project rubric.

2.    Students will be instructed that anything not finished in class, will have to be completed over the weekend.

Weekend:

     Finishing touches are made to the final project.

Day 6 – Monday (Closure):

  1. Groups will set up their company presentations.
  2. Another class or classes will be brought into the room.
  3. Groups will then try to persuade students entering the room to buy stock in their company by giving a short presentation about their company and the product their company sells.
  4. Students entering the room will be encouraged to buy stock in a company that truly interests them.
  5. Tallies will be made to see which company received the most stock.
  6. Students will then make a bar graph to represent the stock that was bought for each company.
  7. Students will be congratulated on a job well done with goodies and refreshments provided after the presentations.

 

Assessment:  Students will be assessed and evaluated on their understanding of the stock market by successfully completing the final project.  Grades will be given according to how well students worked in groups and followed the final project rubric.

 

 

 

 

Final Project Rubric 

 

 

 


            This information will help you when putting together your group’s company.  Your group is to design a simple company and a product your company sells.  Products should be geared towards people in your own age group.  Your group will then want to think of as many ways to entice potential buyers (people who will want to invest in your company) as possible.  Your group will want to use these questions as a guideline to finish this project:

 

 

I will be available for questions and comments at all times.  Make sure to follow this rubric and above all HAVE FUN!

Resources:

 

Lynch, Peter.  “The Miracle of St. Agnes.”  Beating the Street. Simon & Schuster.             1993.

 

Ameritrade

http://www.ameritrade.com/

 

CNNfyi.com – Piggy Bank Stocks

http://www.cnn.com/2000/fyi/news/07/05/piggybank.htm

 

How Stuff Works – Stocks and the Stock Market

http://www.howstuffworks.com/stocks.htm

 

The Motley Fool

http://www.fool.com

 

Stocksquest: A Global Stock Market Game

http://stocksquest.thinkquest.org

 

Value Line Investment Survey

http://www.valueline.com

 

The Virtual Stock Exchange

http://www.virtualstockexchange.com

 

Yahoo! Finance

http://finance.yahoo.com