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Middle and high school activity

Jump$tart National Standards: Financial Responsibility and Decision Making—overall competency and standards 1, 2, and 4; Saving and Investing—overall competency and standards 1–4

Investment Investigator
75 minutes

Related Links
Glossary of Investment Vehicles PDF document logo
Investment Investigator Product Profiles PDF document logo
Investment Investigator Scenarios Student Handout PDF document logo
Investment Investigator Scenarios Teacher Answer Key PDF document logo

Description
This activity introduces the concepts of investment vehicles, return on investment, and risk. In this lesson, students will engage in both self-directed and active learning, using the Extra Credit article and their research as a basis for their application of the key concepts.

Concepts
Saving, risk, investment, liquidity, financial decision-making

Objectives
Students will be able to

  • define four types of investment vehicles;
  • define rate of return;
  • develop an understanding of risk, investment tools, and personal finance decisions;
  • develop an understanding of how to make investment choices based on personal finance and investment risk;
  • apply knowledge of concepts in a group activity; and
  • evaluate and discuss choices regarding risk and return on investment vehicle.

Day 1 (20 minutes)

Procedure
  1. Provide introductory instruction on risk and return on investments. In particular, define and explain the following terms:
    1. Risk
    2. Return on investment (ROI)
  2. Provide introductory instruction on various types of investment vehicles. Define and explain each one. In particular, focus on the following four investment tools (see the "Glossary of Investment Vehicles"):
    1. Savings account
    2. Certificate of deposit
    3. Money market account
    4. Stocks
Materials
  • Homework handout: Extra Credit Spring 2009 article "Preparing for a changing financial marketplace" (one copy for each student)
  • Homework handout: "Glossary of Investment Vehicles" (one copy for each student)
  • Homework handout: "Investment Investigator Product Profiles" (one copy for each student)
Homework Preparation for Next Class
  1. Instruct students to read the Extra Credit article "Preparing for a changing financial marketplace" and review the "Glossary of Investment Vehicles."
  2. Instruct students to conduct online research to complete the "Investment Investigator Product Profiles."

Day 2 (55 minutes)

Procedure

Part 1
  1. Have students divide up into groups of four. Students will spend approximately 10 minutes reviewing their homework assignments.
Part 2
  1. Using the "Glossary of Investment Vehicles," discuss with the class the definition of each savings tool.
  2. Give each student an "Investment Investigator Scenarios" Student Handout sheet and have them work together to come up with what they think is the most appropriate answer for each scenario. Allow about 20 minutes for this portion of the activity.
  3. Once students have an understanding of each type of account, ask if they have ever saved to purchase an item. Do any of the students have one of these types of savings tools?
  4. Review each scenario with the class and discuss the choices they made and why.
Materials
  • Handout: "Investment Investigator Scenarios" Student Handout (one copy for each student)

By Jennifer Staley, senior economic and financial education specialist, New Orleans Branch, and Julie Kornegay, economic and financial education specialist, Birmingham Branch

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