Lesson 1 - Why Save?

Following an introduction that defines saving, the students discuss the idea of ñpaying yourself firstî and the reasons why people save. After reporting on their small group discussions, the students simulate the accumulation of simple interest and compound interest. They conclude the lesson by calculating both simple interest and (using the Rule of 72) the amount of time it takes to double a saved amount when interest is compounded.

Lesson 2 - Invest in Yourself

To explore the concept that people invest in themselves through education, the students work in two groups and participate in a mathematics game. Both groups are assigned mathematics problems to solve. One group is told about a special technique for solving the problems. The other group is not. The game helps the students recognize that improved human capital allows people to produce more in a given amount of time?in this example, more correct answers in the time provided, or in less time. Next, the students identify the human capital required for a variety of jobs. Finally, they learn about the connections among investment in human capital, careers, and earning potential.

Lesson 3 - What Is a Stock?

The students work in small groups that represent households. Each household answers questions about stocks and stock markets. For each correct answer, a household earns shares of stock. At the end of the game, the groups that answered all questions correctly receive a certificate good for 150 shares of stock in The Stock Knowledge Company. They also receive dividends based on their shares. Those who answered fewer questions correctly receive fewer shares and smaller dividends. Finally, the students participate in a role playing activity to learn more about stocks.

Lesson 4 - Finding Financial Information Online

The students learn how to read and understand information presented on financial websites. Working in pairs, they examine sample listings for stocks, mutual funds, and bonds. They participate in a scavenger hunt for financial information, using online sources. As a continuing activity, they track a stock for 10 trading days and report on news items that may have moved the stockÍs price during that time.

Lesson 5 - What Is a Bond?

In this lesson the students learn what bonds are and how bonds work. They learn basic terminology related to bonds. They participate in a simulation activity aimed at showing that bonds are certifi cates of indebtedness, similar to an IOU note. Finally, they explore credit ratings in order to determine the relationship between ratings and bond coupons.

Lesson 6 - What Are Mutual Funds?

The students form class investment clubs that work much in the way mutual funds do. They invest $3,000 (300 shares at $10 a share) in up to six stocks. One year later they revalue their shares and determine whether shares in their class investment clubs have increased or decreased in value. Finally, they read about mutual funds and learn that the concept behind mutual funds is similar to the concept behind their class investment clubs.

Lesson 7 - What Are Stock Markets?

The lesson introduces conditions necessary for market economies to operate. Against this background, students learn concepts and background knowledge?including primary and secondary markets, the role of investment banks, and initial public offerings (IPOs)?needed to understand the stock market. The students also learn about different characteristics of major stock markets in the United States and overseas. In a closure activity, students match stocks with the market in which each is most likely to be traded.

Lesson 8 - Buying on Margin and Selling Short

The students learn about buying on margin and selling short. They learn that buying on margin and selling short can increase potential gains for investors, but at the risk of greater potential losses. They read two short plays to help them understand buying on margin and short selling; then they work in groups to solve problems that illustrate the potential risks and rewards of these two investment techniques.

Lesson 9 - Building Wealth over the Long Term

The students are introduced to the case of Charlayne, a woman who becomes, accidentally, a millionaire. CharlayneÍs success, the students learn, was unexpected, but not a miracle. It can be explained by three widely understood rules for building wealth over the long term: saving early, buying and holding, and diversifying. The lesson uses CharlayneÍs decisions to illustrate each of these rules. It also addresses the risks and rewards associated with different forms of saving and investing.

Lesson 10 - Financial Institutions, in the U.S. Economy

The students participate in a brief trading activity that shows how financial institutions bring savers and borrowers together, thus channeling saving into investment. The students then learn how a growing business gains access to funds, often starting as a proprietorship but at some point ñgoing publicî to issue securities that are then traded in secondary markets. Students see that although popular attention is focused on these secondary markets, it is in primary markets that firms actually gain access to capital. These points are reinforced through a case study of AppleÍs ñmissing billionaire,î a co-founder of the famed technology company who left after only two weeks.

Lesson 11 - Researching Companies

Applying economic reasoning, the students gather information about investment possibilities. They learn that the cost of acquiring information must be compared to the anticipated benefit the information will provide. The students recognize that among specialists there is intense competition to find information about companies. They select companies for their research by participating in a classroom drawing and by listing companies they know.

Lesson 12 - Credit: Your Best Friend or Your Worst Enemy?

The students complete an exercise that shows how credit can be their worst enemy. They learn how quickly credit-card balances can grow and how long it can take to pay off a credit-card debt. They also learn that credit can be their best friend. Working in small groups, they consider seven scenarios and decide in each case whether it would be wise for the people involved to use credit. They discuss their conclusions and develop a list of criteria suitable for use in making decisions about credit.

Lesson 13 - Why Not Save?

The students examine risk-oriented behavior, considering why people often engage in behavior that is dangerous or unhealthy. They are introduced to the concept of cost/benefit analysis and asked to apply what they learn to questions about saving. They generate lists of savings goals and categorize those goals as short-term, mediumterm, and long-term. They learn why longterm goals are more difficult to achieve than short-term goals.

Lesson 14 - How Are Stock Prices Determined?

The students participate in a simulated stock market activity that shows how the price of a share of stock is determined in a competitive market. They analyze the simulation to learn that stock prices are established through the interaction of supply and demand.

Lesson 15 - The Role of Government in Financial Markets

The students learn how government regulation of financial markets is intended to protect investors from fraud and prevent market failure. They also learn how regulatory efforts may be weakened or negated by government failure. In addition to the possibilities of market failures and government failures, students are shown that businesses sometimes lose money because of inherent risk and not because of any wrongdoing. Students consolidate their learning by playing a ñblame game,î applying distinctions between government failure, market failure, and no failure.

Lesson 16 - The Stock Market and the Economy: Can You Forecast the Future?

The students study a graph that illustrates the phases of a typical business cycle. They examine ways in which stock prices may affect overall consumption and investment in the economy. After studying The Conference BoardÍs 10 leading economic indicators, they try their hand at economic forecasting and compare their forecasts to a record of what actually happened.

Lesson 17 - Lessons from History: Stock Market Crashes

The students analyze information about three stock market crashes: 1929, 1987, and 2007. They use the information to make posters that highlight key information about the crashes, including the role played by the Federal Reserve. After presenting their posters to the class, the students discuss ways in which the three events were similar to and different from one another. They also discuss the likelihood of future stock market crashes.

Lesson 18 - Managing Risk

The students are introduced to new applications of the concept of diversification. A teacher-led demonstration offers students the option of accepting a briefcase filled with $150,000 or accepting the results of a double down coin flip. This demonstration sets the stage for students to understand risks involved in the choices we make and how to take steps to reduce risk. Students use the concept of diversification to help them understand how risks can be spread out over different stocks and other assets. By reading a dialogue among hypothetical residents of Valley View Estates, the students learn about insurance as another tool for spreading out risk.

Lesson 19 - Investing Internationally

The students examine the costs and benefits of investing in international markets. They learn that some investors gain international exposure by buying shares of U.S. firms that generate revenue from overseas. They learn about currency exchange rates?how to make conversions from one currency to another, why currencies appreciate and depreciate in value, and how the exchange rate for a currency affects the amount of a foreign stock an investor can buy. They learn about the concepts of a strong and a weak dollar and learn who benefits and who is hurt when the dollar is strong or weak.

Lesson 20 - The Language of Financial Markets

This lesson provides a vocabulary review with an interactive Quiz Bowl game to reinforce studentsÍ knowledge of financial terms used in previous lessons. The students work in small groups to make flash cards to display these financial terms. The terms are grouped in five categories: Buying and Selling in the Market; Exchanges and Indexes; People in Financial Markets; Stocks, Bonds, and Mutual Funds; Technical Terms. Each group of students begins by reviewing the terms in one category. Then the students pass their flash cards from group to group until everyone has had an opportunity to review all of the terms. The lesson concludes with a Language of Financial Markets Quiz Bowl game.

Lesson 21 - Planning Your Financial Future

This lesson provides students with a review and an opportunity to apply many of the concepts presented in earlier lessons. The students examine different sorts of risk that come with various investments, and they learn about their own tolerance for risk. They apply their knowledge in an activity in which they act as financial advisers, offering financial advice in four cases.