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SELECT OTHER LESSON PLANS
 Select One Lesson 1: INVEST IN YOURSELF Lesson 2: THE BUSINESS OF INTEREST Lesson 3: PAY CREDIT WHEN CREDIT IS DUE Lesson 4: RISKY BUSINESS -- OR NOT!
RISKY BUSINESS -- OR NOT!

OVERVIEW

In this lesson, students will learn about stocks and understand what it means to buy stock in a company. Students will develop an understanding that investing in a company's stock involves risk, and will also learn factors that make a company risky. They will read about stocks online, and will discuss factors that make a company risky. Students will watch a segment of WHAT'S UP IN FINANCE? to learn about one instance of risk at the corporate level. They will then review a completed comparison of two companies with very different risk factors listed, and will discuss as a group why one company's stock would be much riskier to buy.

Finally, students will compare three companies' profiles and determine which company's stock would be the riskiest to buy, based on risk factors they have learned. They will list the risk factors of each company in a written analysis. Students will then decide which of the three stocks would be the least risky to purchase.

GRADE LEVEL: 7-12

TIME ALLOTMENT: 3 classes at 45 minutes per class

SUBJECT MATTER: Math, Finance, Economics

LEARNING OBJECTIVES

Students will be able to:
• Understand the concept of risk
• Understand the concept of stock ownership
• Understand the importance of risk analysis
• Learn techniques for investment
• Understand the concept of profitability
• Learn how to compare companies to each other
• Learn how to analyze risk

STANDARDS

1. National Council of Teachers and Mathematics
Principles and Standards for School Mathematics

Data Analysis and Probability
• Formulate questions that can be addressed with data and collect, organize, and display relevant data to answer them;
• Select and use appropriate statistical methods to analyze data;
• Develop and evaluate inferences and predictions that are based on data;
• Understand and apply basic concepts of probability.

Representation
• Create and use representations to organize, record, and communicate mathematical ideas;
• Select, apply, and translate among mathematical representations to solve problems;
• Use representations to model and interpret physical, social, and mathematical phenomena.

2. JumpStart Coalition for Personal Financial Literacy

Saving and Investing
Students will be able to:

1. Explain the relationship between saving and investing.
2. Describe reasons for saving and reasons for investing.
3. Compare the risk, return, and liquidity of investment alternatives.
4. Describe how to buy and sell investments.
5. Explain how different factors affect the rate of return of investments.
6. Evaluate sources of investment information.
7. Explain how agencies that regulate financial markets protect investors.

3. Mid-continent Research for Education and Learning (McREL)
Benchmarks for Economics

Standard 3
Understands the concept of prices and the interaction of supply and demand in a market economy

MEDIA COMPONENTS

Video:

Web sites:

"What Is a Stock, Anyway?"
http://biz.yahoo.com/edu/st/sm_st1.sm.html

MATERIALS

Teachers will need the following supplies:
• Computer with connection to a screen or television on which to project the Web-based video clips, or computer stations where students can watch the clips
• Board and/or chart paper
• "Stock Investing Definitions" Teacher Organizer
• Answer Key: "Risk Analysis" Student Organizer

Students will need the following supplies:

PREP FOR TEACHERS

1. Bookmark the Web sites used in the lesson on each computer in your classroom, or upload all links to an online bookmarking utility such as www.portaportal.com.

2. Preview all of the video clips and Web sites used in the lesson to make certain that they are appropriate for your students, currently available, and accessible from your classroom.

3. Download the video clips used in this lesson onto your hard drive, or prepare to stream the clips from your classroom.

4. Print out the "Stock Investing Definitions" Teacher Organizer to copy the terms and definitions on the board.

5. Print out the Student Organizers: "Risk Factors," "Market Mover," "Company Profiles," and "Risk Analysis." Make enough copies so that each student has one copy of each organizer.

6. When using media, provide students with a FOCUS FOR MEDIA INTERACTION, a specific task to complete and/or information to identify during or after viewing of video segments, Web sites, or other multimedia elements.