Grade: 8Lesson 12

Why do I need to invest in financial assets and what are my choices?

SS.8.FL.5.1 Describe the differences among the different types of financial assets, including a wide variety of financial instruments such as bank deposits, stocks, bonds, and mutual funds. Explain that real estate and commodities are also often viewed as

financial assets.

Correlated Literacy Standards:

LAFS.68.RH.3.7 Integrate visual information (e.g., in charts, graphs, photographs, videos, or maps) with other information in print and digital texts.

LAFS.68.RH.1.2 Determine the central ideas or information of a primary or secondary source; provide an accurate summary of the source distinct from prior knowledge or opinions.

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SS.8.FL.5.1 Describe the differences among the different types of financial assets, including a wide variety of financial instruments such as bank deposits, stocks, bonds, and mutual funds. Explain that real estate and commodities are also often viewed as financial assets.

It’s Fly To Diversify….Your Financial Assets

Lesson Number 12:

Correlated Florida Standards (See Full Text on Cover Page) LAFS.68.RH.3.7 LAFS.68.RH1.2

Essential Question What is a financial asset? What are the differences among various types of financial assets? What are some of the key things to look for when researching a specific financial asset?

Learning Goals/Objectives Compare and contrast different types of assets including stocks, bonds and mutual funds. Find specific details from a fund table

OverviewIn this lesson, adapted from “Learning, Earning and Investing” from the Council for Economic Education, students will be able to describe the differences and similarities between stocks, bonds, and mutual funds. Additionally, students will be able to read and interpret various financial asset tables.A previous lesson introduced students to what stocks are; this lesson will teach students how to read and compare some components of a stock, bond, and mutual fund table.

Materials Learning, Earning and Investing, Lesson 4 from the Council for Economic Education,

http://lei.councilforeconed.org/documents/978-1-56183-572-0-activity-lesson-04.pdf Financial Table Analysis handouts: Stocks, Bond, and Mutual Funds (attached) Promethean or Smart Board Internet Access Finding Financial Information PowerPoint from Learning, Earning and Investment, Lesson 4

Venn Diagram, http://www.math-aids.com/images/Venn-Diagram-Graphic-02.png

Time 50 minutes

Activity SequenceINTRODUCTION/HOOK

Ask students what they remember about stocks from the previous lesson. They should be able to recall that a stock represents ownership in a company and the hope of getting a return of money for

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their investment. Ask students if they know of any other financial assets? If they do not, inform the students that investors have many other ways of having their money earn them more money, but it all comes with a risk, just like stocks. (3 minutes)

ACTIVITY1. Inform the class that they will be learning about stocks, bonds, and mutual funds for today’s lesson.

All of these are what are known as “financial assets.” Explain that a financial asset is a commodity that an investor has that is a part of their overall financial portfolio in hopes of receiving a monetary gain from their investment. (2 minutes)

2. Show and explain the “Finding Financial Information”PowerPointpresentation available in the Materials section. The PowerPoint will cover three main topics, stocks, mutual funds, and bonds. The first slide of a topic will be a brief introduction that describes each of the three financial assets. The second slide will be a table that correlates with the handout for students. (5 minutes)

3. Break students into small groups of three of four and distribute the attached handouts on stocks, bonds and mutual funds. (3 minutes)

4. Read through each table with the students and explain the symbols and abbreviations. Note to teacher: clarificationfor each of the symbols and components of the financial asset tables is explained in the lesson from the Learning, Earning and Investing from the Council for Economic Education, http://lei.councilforeconed.org/documents/978-1-56183-572-0-activity-lesson-04.pdf(5 minutes)

5. Have students work together in their small groups to answer the four questions on each handout. (10 minutes)

6. Review and discuss the correct answers for the stock, mutual fund and bond tables with the class. (2 minutes)

7. Ask students to consider what they think are some of the most important things to look for when researching a stock, mutual fund, and bond. Students may work individually, with a partner, or in their small groups. Some of the responses you should be looking for are: symbol so you know what you are looking up, asking price, yield percentage, 52 week high/low for a stock and prior closing date price. (5 minutes)

8. Have students share their responses to step 7. (2 minutes)

9. Distribute a Venn Diagram to each students and have them use it to compare and contrast the similarities and differences between stocks, mutual funds and bonds. (8 minutes)

CLOSURE Have students share their responses to step 9 and review the basic differences between stocks, bonds

and mutual funds and remind students that each financial asset has advantages and disadvantages. Remind students that when they are in a position to start investing, they should always remember to diversity their investments to help minimize risk. (5 minutes)

OPTIONAL EXTENSION SUGGESTION/HOME LEARNING Students may use the internet to research different types of financial assets that were just discussed in

class. Have them compare two stocks, two mutual funds, or two bonds. Have students write down

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the differences in relation to the specific asset that they choose. Additionally, have students provide a response as to which asset they would choose from the two they researched and explain why they reached that decision.

Sources/Bibliographic Information that contributed to this lesson:

http://lei.councilforeconed.org/lessons.php?lid=68401

http://www.themint.org/kids/what-is-the-stock-market.html

http://www.math-aids.com/images/Venn-Diagram-Graphic-02.png

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Name:______________________________Period:________Date:______________________________

Directions: Answer the following questions regarding the following stock table:

Table and Questions Courtesy of: Learning, Earning, and Investing for a New Generation: Council for Economics Education. New York, NY

Stocks:

1. What is the 52-week high stock price for Boeing?

2. By 10:37 on that December 19th, how many shares of Boeing stock had been traded? (Hint: look at the Volume).

3. What is the annual dividend yield for Boeing?

4. What was the closing price of Boeing stock on the previous day of trading?

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Name:______________________________Period:________Date:______________________________

Directions: Answer the following questions regarding the following mutual fund table:

Table and Questions Courtesy of: Learning, Earning, and Investing for a New Generation: Council for Economics Education. New York, NY

Mutual Funds:

1. What is the Net Asset Value of the Vanguard Small-Cap Index Fund?

2. What is the current yield of this fund?

3. What is the year-to-date percentage rate of return of this fund?

4. What is the symbol an investor would use to look up this fund?

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Name:______________________________Period:________Date:______________________________

Directions: Answer the following questions regarding the following bond table:

Bonds:

1. What is the coupon rate of interest on the Sprint Nextel bond?

2. What is the current price (in dollars) of the bond?

3. When would an investor be able to receive their original invest amount and interest from the bond?

4. What is the current percentage yield of the bond?

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