Unit 4 Capital and Financial Markets Lesson 9 Stocksarchives.lessoncorner.com/355a3d3c95a59305b.pdf · Unit 4 Capital and Financial Markets Lesson 9 Stocks 2 Lesson 9, Stocks, is

Unit 4 Capi ta l and F inanc ia l Markets Lesson 9 Stocks

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Principles of Finance Lesson 9: Stocks


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Lesson 9, Stocks, is the second lesson in Capital and Financial Markets, the fourth unit within the AOF Principles of Finance course. Lesson 9 offers students general knowledge of corporate stock, what it represents, and how stock markets work. Students learn basic vocabulary of the stock market, identify what affects the market value of stocks, and discover why stock market value is important to businesses. They also define an initial public offering and explain the advantages and disadvantages of taking a company public. This lesson will likely require 4 of the 11 class sessions planned for this unit.

Getting Started This section includes:

• Objectives

• Prerequisites

• Major Topic

• Standard(s)

• Key Concept(s) Taught

• Key Vocabulary

• Key Skills Taught

• Habits of Mind

• Curricular Integration

Lesson: 9 Stocks Getting Started


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Profit

Objectives • Describe corporate stock and what it represents

• Explain the advantages and disadvantages of taking a company public

• Define an initial public offering

Prerequisites • Students must understand that businesses need capital to operate and that

stocks are one source of public funds.

Major Topic • What are corporate stocks, and why are they important?

Standard(s) • Apply writing skills to enhance financial career opportunities (States’ Career

Clusters: Finance)

• Apply economic skills to enhance financial career opportunities (States’ Career Clusters: Finance)

• Use correct grammar, punctuation, and terminology to write and edit documents (States’ Career Clusters: Finance)

• Apply problem-solving and critical-thinking skills to resolve a problem (States’ Career Clusters: Finance)

• Exhibit personal skills needed to succeed in the workplace (States’ Career Clusters: Finance)

• Analyze and interpret financial data to produce accurate reports (States’ Career Clusters: Finance)

Lesson: 9 Stocks

Getting Started


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Habits of Mind • Persisting

• Thinking flexibly

• Striving for accuracy

• Thinking and communicating with clarity and precision

• Thinking interdependently

Curricular Integration • Adjust use of spoken, written, and visual language (e.g.,

conventions, style, vocabulary) to communicate effectively with a variety of audiences and for different purposes (National Council of Teachers of English)

• Employ a wide range of strategies as they write and use different writing process elements appropriately to communicate with different audiences for a variety of purposes (National Council of Teachers of English)


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Materials & Resources This section includes:

• Teacher Resources

• Student Resources

• Supplies

• Additional Resources

Teacher Resources • Teacher Resource 9.1, “Guide: Stock Market Simulation”

• Teacher Resource 9.2, "Rubric: Public Financing Essay”

• Teacher Resource 9.3, “Rubric: How My Life Will Change After the IPO Essay”

Student Resources • Student Resource 9.1, “Notes: Taxonomy of Terms for Stocks and Bonds”

• Student Resource 9.2, “Notes: W-K-L Chart for Stocks”

• Student Resource 9.3, “Reading: The Vocabulary of Stocks”

• Student Resource 9.4, “Reading: Why Go Public?”

• Student Resource 9.5, “Reading: IPOs”

• Student Resource 9.6, “Planning Graphic: Public Financing Essay”

Supplies • Board space (white or chalkboard)

• Cardboard

• Black marker

Additional Resources • Calculator (for stock market simulation exercise)

Lesson: 9 Stocks Materials and Resources


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Lesson: 9 Stocks Assessment

Assessment This section lists the student assessment products for this lesson and the criteria by which they should be assessed.

Assessment Product Assessment Criteria

Notes in Student Resource 9.2, “Notes: W-K-L Chart for Stocks”

Use as a formative assessment for feedback to students.

Double-Entry Journal, and summative statement on Advantages and Disadvantages of Going Public

Use as a formative assessment for feedback to students.

Public Funding Essay Teacher Resource 9.2, "Rubric: Public Funding Essay”


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Lesson: 9 Stocks Lesson Steps

Lesson Steps

Step Minutes Activity

CLASS PERIOD 1

1 20 Introduction: Drawing on Prior Knowledge Remind students that the previous lesson introduced financing options for businesses and the concepts of short-term and long-term funding needs. Explain that this lesson focuses on the common form of public financing called stocks. The next lesson, Lesson 10, will concentrate on bonds. Distribute copies of Student Resource 9.1, “Notes: Taxonomy of Terms for Stocks and Bonds,” and explain to students that they will be expected to continuously add to this chart as they work through this and the following lesson. Encourage students to keep the chart available whenever they read and write about stocks and bonds. Invite students to begin building their taxonomies. Encourage them to write down terms they feel they know, terms they have heard but know little about, and terms they encounter for the first time. Consider using this three-step approach to help students build their charts:

1. Soloing (3 minutes): Walk around the room and see what terms students are jotting down. Before asking students to share, discuss individually with students or discuss as a group a few of the terms students have written down and ask them to consider the importance (or lack of it) of each term.”?


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2. Sharing in groups (4 minutes): Ask students to further develop their understanding of the terms they have found—and ask them to help others to similarly develop their understanding—by working in small groups for a brief period of time.

3. Cross-pollinating (5 minutes): Have students leave their taxonomies on their desks and then walk around the room collecting terms from other students’ charts. When they have finished, ask students to jot down the new terms they’ve identified on their taxonomies.

2 20 Class Activity: Speculating About Stocks Distribute Student Resource 9.2, “Notes: W-K-L Chart for Stocks.” Explain the significance of the chart name:

• W = What

• K = Know

• L = Learn

Tell the students that the questions on the chart mirror what they will learn in this lesson. Review the questions with the students:

• What is stock?

• What is a stock market?

• Why might a company issue stock?

• Why might a company sell stock to the public in subsequent offerings?

• What is the process for selling and buying stocks?

• What are the advantages and disadvantages of public financing in the form of stocks?


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First, ask students which questions they feel they can answer immediately, and which ones they want to learn more about. Then ask them to speculate about gaps in their knowledge.

For example, if they say they don’t know the advantages and disadvantages of public financing, ask them to work in pairs to come up with some possibilities. Have student share some of their speculations with the class.

3 15 Student Reading: Learning Terms for Talking About Stocks Distribute Student Resource 9.3, “Reading: The Vocabulary of Stocks.”

Introduce the reading by telling students that it will fill in some of the gaps in their knowledge about stocks and the vocabulary used to talk about them.

When they have finished their reading, ask students to complete the first question on Student Resource 9.2, “Notes: W-K-L Chart for Stocks”:

• What is stock?

Suggest that students verbalize their knowledge to partners to reinforce the content.

Question the students to ensure that they understand the material in the reading, and answer any questions they may have.


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CLASS PERIOD 2

4 25 Research and Note Taking: Defining a Stock Market Introduce the concept of a stock market by telling students that the United States has some of the most sophisticated financial marketplaces on earth. Billions of securities are traded every business day. Then make plain that—despite the fact that with all of this sophistication, you would think that the price of a security would be easy to determine—in practice, determining the price of a stock in advance is not an easy activity.

Explain that, looking at it simply, the price of a stock is driven by the same two major forces that drive the price of any product: supply and demand. The stock market is basically a market, and each stock is worth only what someone is willing to pay for it.

A share of stock can be valued using widely accepted techniques that all informed investors know. However, understanding the behavior of the stock market” is complicated and challenging.

Next, to help them understand the basic function of a stock market, have students read a description of a stock market from one of the following websites:

www.factmonster.com/spot/stockmarket.html

http://money.howstuffworks.com/stock.htm

www.nyse.com/about/education/1098034584990.html

Encourage them to use their W-K-L charts (Student Resource 9.2) for note taking. Ask them to compare the speculations they noted on their charts with what they read.

If you have students work in pairs, request that they use a Read-Talk-Write approach for each passage.

Have the student pairs very quickly present their findings to another student pair.


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5 15 Student Reading, Note Taking, and Prediction Testing: Understanding Why Companies “Go Public” Having introduced the stock market and its workings, now introduce the relationship between stock markets and the businesses they represent by asking students:

• Why might a company sell stock to the public?

Provide students with copies of Student Resource 9.4, "Reading: Why Go Public?" and Student Resource 9.5, “Reading: IPOs."

When students have completed their reading, have them use their W-K-L charts (Student Resource 9.2) to expand their notes, compare their predictions with their findings from the readings, and add some questions.

Encourage students to expand their taxonomies (Student Resource 9.1) and clarify key elements of information about the terms introduced.

6 15 Student Research and Note Taking: Researching the Pros and Cons of Going Public Pair students for a research activity that will culminate in a point-counterpoint activity. The activity will continue into the next class session.

Explain the assignment: students will need to locate articles discussing the advantages and disadvantages of issuing stock to finance a company. Suggest that the students conduct an Internet search for articles that describe both the positive and negative aspects of stock financing.

The websites of the major stock exchanges and investment houses have information on this topic, as do other sources.


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A few suggestions appear below:

www.nyse.com

www.raymondjames.com/ipo.htm

http://findarticles.com/p/articles/mi_m1154/is_n6_v76/ai_6448780

www.devicelink.com/mddi/archive/98/10/006.html

www.venturevest.com/disadvantages.html

Suggest that students use a double-entry journal format to record the key advantages and disadvantages of issuing stock, based on their explorations.

If you pair students, ask that they use a Read-Talk-Write approach to examine the articles they collect.

As a homework assignment, ask student to locate additional articles to read and to add elements to their table based on their reading.

CLASS PERIOD 3

7 30 Student Reading and Note Taking: Researching the Pros and Cons of Going Public (Continued) When class resumes, provide additional time for student pairs to continue their reading and to expand the information they have collected regarding the advantages and disadvantages of taking a company public.

Tell students to prepare to present their findings later in the class session.


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8 25 Point-Counterpoint Discussion: Sharing the Pros and Cons of Going Public With students lists of advantages and disadvantages completed, ask students to imagine that they themselves had an early-stage company in need of funding.

Ask them to list the top three considerations from their point of view of going public based on what they’ve read,

Give students 10 minutes to write down metacognitive statements supporting their position, drawing from their notes. They should use the following pattern to draft their statements:

There are several advantages (or disadvantages) to raising financing for a company in a stock market.

Among the most important are:

1.

2.

3.

Ask them to submit the resulting statements at the end of class for review.


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CLASS PERIOD 4

9 45 Role-Play: Playing the Stock Market Simulation Conduct the stock market simulation explained in Teacher Resource 9.1, "Stock Market Simulation."

10 10 Homework: Writing a Public Financing Essay As a homework assignment, ask students to write an explanatory essay listing and discussing the pros and cons of public financing for a company. Provide students with a copy of Student Resource 9.6, “Planning Graphic: Public Financing Essay” to help think about and organize their essay. Encourage students to use their taxonomies and W-K-L charts (Student Resources 9.1 and 9.2) in preparing their essays. This essay is summative in nature and can serve as an end-of-lesson assessment. Grade the essays using Teacher Resource 9.2, "Rubric: Public Financing Essay."


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Lesson: 9 Stocks Extending the Lesson

Extending the Lesson This section indicates possible supports for students with special needs, as well as enrichment extensions for advanced students.

Additional Student Supports Cooperative learning techniques will help students with special needs succeed through peer teaching and division tasks and responsibilities.

Enrichment Extensions To review what they have learned about the challenges associated with going public, ask students to assume the identity of one of ECPak’s founders, either Eduardo Cisneros or Mary Ann Chang, in the days before ECPak went public. Have them think about how their lives will change if they decide to take ECPak public.

Encourage them to consider changes to their:

• Personal life

• Professional life

• Financial life

• Business concerns

Request that students record their thoughts in a simple one-page essay.

Use Teacher Resource 9.3: "Rubric: How My Life Will Change After the IPO Essay" to assess student performance.

Documents

Unit 4 Capital and Financial Markets Lesson 9 Stocksarchives.lessoncorner.com/355a3d3c95a59305b.pdf · Unit 4 Capital and Financial Markets Lesson 9 Stocks 2 Lesson 9, Stocks, is