Topic Overview - Education Bureau · Understand the characteristics of shares, debentures, certificate of deposit, treasury bills, mutual funds and annuities. Overview of ... PowerPoint

Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element Module E4 Resources Management

Topic Overview

Topic Strategies and Management

E4: Resources Management – Features of Different Financial Products

Level S3

Duration 3 lessons (40 minutes per lesson)

Learning Objectives:

1. Understand the concept of financial products,

2. Introduce different types of financial products,

3. Understand the characteristics of different financial products,

4. Understand the operation of Hong Kong Deposit Protection Board,

5. Understand different types of insurance products and their usage, and

6. Understand the characteristics of shares, debentures, certificate of deposit, treasury bills,

mutual funds and annuities.

Overview of Contents:

Lesson 1 Bank Deposits

Lesson 2 Insurance Products

Lesson 3 Other Financial Products

Resources:

Topic Overview and Teaching Plan

PowerPoint Presentation

Suggested Activities:

Class Discussion

In-class exercise

Case study


Lesson 1

Theme Bank Deposits

Duration 40 minutes

Expected Learning Outcomes:

Upon completion of this lesson, students will be able to:

1. describe different types of financial products,

2. explain the features of bank deposits, and

3. describe the operation of Hong Kong Deposit Protection Board.

Teaching Sequence and Time Allocation:

Activities Reference Time Allocation

Part I: Introduction

Teacher starts the lesson by asking students how to treat

their red pocket money and then introduces the concept

of investment.

PPT #2 – 3 5 minutes

Part II: Content

Teacher explains what are financial products and

introduces different types of financial products.

Teacher explains the features of different types of bank

deposits.

PPT #4 – 5

PPT #6 – 9

6 minutes

8 minutes

Activity 1: Group discussion

Students discuss in a group of 3 to 4 regarding the

appropriate situation for various types of bank

deposits.

Teacher goes through the answer with students and

makes conclusion.

PPT #10

PPT #11

6 minutes

4 minutes

Teacher introduces Hong Kong Deposit Protection Board

and describes its coverage.

PPT #12 - 15

9 minutes

Part III: Conclusion

Teacher concludes the lesson by reviewing the key points

covered.

2 minutes


Lesson 2

Theme Insurance Products

Duration 40 minutes



1. describe the nature, characteristics and functions of insurance, and

2. describe different insurance products.




Teacher recaps the concept of investment. 2 minutes

Part II: Content

Teacher explains the reasons for buying insurance,

followed by a brief introduction of different types of

insurance.

PPT #2 – 4

8 minutes

Activity 1: Class discussion

Students are required to list different types of

insurance products in HK.

Teacher goes through the answers with students and

makes conclusion.

PPT #5

PPT #6

3 minutes

3 minutes

Teacher explains the major types of insurance products. PPT #7 – 10 12 minutes

Activity 2: Case study

Students discuss whether it is appropriate for the

person in the case to develop an insurance plan.

Teacher goes through answers with students and makes

conclusion.

PPT #11

PPT #12

5 minutes

5 minutes



covered.

2 minutes


Lesson 3

Theme Other Financial Products

Duration 40 minutes



1. explain and differentiate the features of shares, debentures and other financial products.




Teacher recaps the concept of investment. 2 minutes

Part II: Content

Teacher introduces features of shares, debentures,

certificate of deposit as financial products and explains

their features.

Teacher describes the characteristics of financial

products.

PPT #2 – 4

PPT #5

15 minutes

7 minutes

Activity 1: Group Discussion

Students are required to discuss their investment

habit.

Teacher discusses with students about their investment

portfolio, asks whether they are willing to take risk or

not and reiterates again the relationship between risk

and return.

PPT #6

8 minutes

6 minutes



covered.

2 minutes

1

Teacher invites students to share. They may say they would buy something they have been longing for so long (then teacher can recap the topic of consumption patterns and see whether students know the items they want to buy are needs or just wants!)Some may say put into the bank or make investments, teacher can then describe the function of saving and other financial products.

2

Teacher explains to students ‘surplus cash’ means no more consumption is needed with the use of this cash. Teacher then directs students to think about what is investment.

3 4

5 6

Teacher may inform students that nowadays some banks (e.g. Hang Seng Bank & Fubon Bank) are paying interests for the money deposited in current account.

7 8

9 10

11

Teacher introduces Hong Kong Deposit Protection Board and describe its objectives and operations.

12

13 14

Bank failure is rare in Hong Kong. In case a bank fails and the deposits are eligible for protection, the DPS will compensate the depositors.

15 16

17 18

Teacher explains it is necessary for a business to buy insurance as part of their risk management policy. Some insurance policy is statutorily required for either a person or business e.g. motor insurance.

19 20

21 22

23 24

Teacher can explain some life insurances are not only be claimed when the insured deceased but with a function of saving that the insured can withdraw the sum when he/she is retired or in emergency.

25 26

27

Students are free to discuss and they may not have much ideas on insurance. Teacher should mention the function of insurance is a kind of protection and risk management technique. Sufficient protection is fair enough to cover any loss incurred. i.e. it is no need to have a compensation of $1 billion for which the obligations are just less than $1 million. The cost of the insurance is high for $1b compensation anyway!

28

29 30

Shares, stocks, equities and securities are words that are generally used interchangeably.

31

Teacher may explain the concept and feature of iBond to students for their easy understanding.

32

33

After discussion of all types of financial products, teacher concludes the characteristics of financial products.

34

Teacher discusses with students about their investment portfolio and see whether they are willing to take risk or not, then recaps again the relationship between risk and return.

35 36


Classwork/Home Assignment P.1

Section A: Multiple Choice Questions (@1, total 10 marks)

1. Which of the following is not a financial product?

A. Insurance.

B. Treasury bills.

C. Cash.

D. Mutual funds.

Level of difficulty: *

2. What is the purpose of opening a current account?

A. Saving money.

B. Issuing cheques.

C. Earn interest.

D. Credit card payment.


3. The maximum protection for deposits in each license bank in Hong Kong under the Deposit

Protection Scheme is:

A. $100,000.

B. $500,000.

C. $1,000,000.

D. $3,000,000.


4. Which of the following types of deposits is not protected by Deposit Protection Scheme?

A. Current account deposit in HSBC.

B. Saving deposit in Bank of China.

C. 1-year fixed deposit in Citibank.

D. 10-year fixed deposit in Standard Chartered Bank.




5. The following are reasons for buying insurance except:

A. Receive compensation when accident occurs.

B. Earn extra income when accident occurs.

C. Protection against liability to third parties.

D. Reserve education fund for children.

Level of difficulty: **

6. Which of the following is not the need for life insurance?

A. Dependent’s living expenses.

B. Educational funds.

C. Retirement income.

D. Medical expenses.


7. Which of the following medical expenses is not covered by a medical insurance.

A. Cancer.

B. Cosmetic surgery.

C. Bird flu.

D. Heart disease.


8. The value of an investment-linked insurance depends on ___________ of its underlying

investment portfolio.

A. risk.

B. types of stocks.

C. performance.

D. rights.




9. One of the features of iBond is:

A. fixed interest rate.

B. interest rate is varied depends on Consumer Price Index.

C. issued at discount.

D. high risk.

Level of difficulty: ***

10. Which of the following is the characteristic of mutual funds?

A. Professionally managed.

B. High risk.

C. Generally issued by commercial banks.

D. There is a maturity date.




Section B: Short Questions (20 marks)

*** 1. Mr. Chan had three deposits as below:

(i) HK$1,000,000 placed in savings account in Bank of China.

(ii) AUD10,000 placed in savings account in Citibank.

(iii) HK$300,000 placed in the current account in Bank of China

(Shenzhen Branch).

Discuss whether these three deposits will be protected by Deposit

Protection Scheme?

(9 marks)

** 2. Explain the relationship between risk and return of investment. (5 marks)

* 3. Briefly describe the characteristics of financial products. (6 marks)



Suggested Solutions

Section A: MCQs

1. C 2. B 3. B 4. D 5. B

6. D 7. B 8. C 9. B 10. A

Section B: Short Questions.

Question 1

(i) HK$1,000,000 placed in savings account in Bank of China.

Yes, it is a deposit in a licensed bank in HK but the protection is

limited to a limit of HK$500,000.

(ii) AUD10,000 placed in savings account in Citibank.

Yes, all the sum is protected as the HKD equivalent is below

HK$500,000 and is placed in a licensed bank in HK.

(iii) HK$300,000 placed in the current account of Bank of China

(Shenzhen Branch).

No, because the sum is not placed in a licensed bank in HK.

(@3, total 9 marks)

Question 2

The following graph provides a perspective on the relationship between

the risks and returns of several investment assets.

They are positively correlated. i.e. the higher the risk of an investment,

the higher its return and vice versa. For example, an investment in

bonds may enjoy a higher return than a bank deposit and there is a

higher risk of not getting the money back.

(5 marks)



Question 3

Three characteristics are common to all financial products. These are

yield, risk and liquidity.

• Yield is the amount of cash the owners of a financial product receive

or the rate of return on a financial asset.

• Risk is the possibility of loss that may prevent adequate return on a

financial product.

• Liquidity is the ability of a financial product to be converted into

cash.

Yield and liquidity are inversely related while yield and risk are directly

related.

(@2, total 6 marks)

Documents

Topic Overview - Education Bureau · Understand the characteristics of shares, debentures, certificate of deposit, treasury bills, mutual funds and annuities. Overview of ... PowerPoint