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Thank you for considering Math Behind the Market for use with The Stock Market Game (SMG)
program in your classroom. Fully sponsored by the McGraw-Hill Companies, Math Behind the
Market provides you with activities that promote a deeper understanding of complex numbers,
quantitative relationships, statistical analysis, and algebraic representation among your
students.
The activities in Math Behind the Market are organized into four main mathematic strands:
1. Thinking Algebraically Recognizing patterns, developing formulae, and executing
algorithms efficiently.
2. Interpreting Statistics Reading and interpreting statistical information quickly and
accurately.
3. Communicating Quantitatively Representing information through the creation of
graphs, charts, and tables as well as speaking clearly about mathematics.
4. Tackling Complex Problems - Honing critical thinking skills through multi-step
computations and word problems.
The activities in Math Behind the Market are correlated to the National Council of Teachers of
Mathematics (NCTM) Principles and Standards in School Mathematics. They are organized
around lessons addressing twelve core investment topics identified by the SMG program as
essential to a fundamental understanding of saving and investing.
We recommend that the activities in this book be used in conjunction with the core topic
lessons. However, we understand that students and teachers approach The Stock Market Game
and the Math Behind the Market activities from abroad range of prior knowledge and class
schedules. We rely on your judgment as teacher to determine the most effective use of this
book.
For information about The Stock Market Game program near you, please visit
www.stockmarketgame.org.
Thank you again for choosing The Stock Market Game program as a part of your daily
instruction.
Sincerely,
Vincent Young
Director of Curriculum Initiatives
The Stock Market Game
SIFMA Foundation for Investor Education
What is a Stock?
Lesson Summary
What is a Stock? discusses the many facets of stock in detail and uses two leading chocolate
companies to explain the difference between a public and private company.
Lesson Objectives
Define the terms: stock, investor, public company, private company, earnings, and
dividends.
Make group decisions on the benefits and risks of investing in stocks.
Calculate gains and losses of sample stock sales.
NCTM Standards
1A - Understand numbers, ways of representing numbers, relationships among numbers, and
number systems.
1B - Understand meanings of operations and how they relate to one another.
1C - Compute fluently and make reasonable estimates.
5A - Formulate questions that can be addressed with data and collect, organize, and display
relevant data to answer them.
5C - Develop and evaluate inferences and predictions that are based on data.
6A - Build new mathematical knowledge through problem solving.
6B - Solve problems that arise in mathematics and in other contexts.
6C - Apply and adapt a variety of appropriate strategies to solve problems.
7B - Make and investigate mathematical conjectures.
7C Develop and evaluate mathematical arguments and proofs.
8A - Organize and consolidate mathematical thinking through communication.
8B - Communicate mathematical thinking coherently and clearly to peers, teachers, and
others.
9A - Recognize and use connections among mathematical ideas.
9C - Recognize and apply mathematics in contexts outside of mathematics.
10A Create and use representations to organize, record, and communicate mathematical
ideas.
10B Select, apply, and translate among mathematical representations to solve problems.
10C Use representations to model and interpret physical, social, and mathematical
phenomena.
Mathematical Strands
Thinking
Algebraically
Interpreting
Statistics
Communicating
Quantitative
Information
Tackling
Complex
Problems
THINKING ALGEBRAICALLY
Calculate the gain or loss for each stock and record your answer in the third
column under Change in Price. In the fourth column, write whether the change
in price is a gain or loss.
Price Bought
Price Sold
$36.13
$37.01
$12.42
$12.27
$58.43
$53.48
$ 5.39
$ 6.02
$44.95
$45.99
$29.83
$28.75
$ 9.48
$15.02
$22.58
$22.59
Change in Price
Gain or Loss
Multiply the Number of Shares by the Price Per Share to calculate the Total Cost
of Shares.
Example: 500 shares x $22.40 per share = $11,200.00
Number of Shares
500
$22.40
360
$12.70
70
$95.50
740
$41.00
85
$31.00
1050
$34.00
What is a Stock?
Math Behind the Market Beginner Sample
2
THINKING ALGEBRAICALLY
Enrichment
Find the cost of the following:
A. 90 shares at $45.00 per share
2% Commission
A.
B.
C.
What is a Stock?
Math Behind the Market Beginner Sample
3
Total Cost
INTERPRETING STATISTICS
1. If you know the number of shares you bought and the price per share, how
would you calculate the total cost of your investment?
3. This is a table of closing prices from March to September for DWA stock.
Month
March
April
May
June
July
August
September
Price
$26.00
$27.00
$26.00
$23.00
$21.00
$21.00
$25.00
Make a table that shows how much your investment is worth during each of the
months listed in the table.
Month
Price
Investment Value
What is a Stock?
Math Behind the Market Beginner Sample
4
Date
4/3/2007
4/4/2007
4/5/2007
4/6/2007
4/9/2007
4/10/2007
4/11/2007
4/12/2007
4/13/2007
Value
$100,000
$102,430
$101,021
$99,321
$97,230
$98,933
$99,982
$101,222
$102,000
Rounded Value
$105,000
$104,000
$103,000
$101,000
$100,000
$99,000
$98,000
$97,000
$96,000
What is a Stock?
Math Behind the Market Beginner Sample
5
07
4/
13
/
07
4/
12
/
07
4/
11
/
07
4/
10
/
/0
7
4/
9
/0
7
4/
8
/0
7
4/
7
/0
7
4/
6
/0
7
4/
5
/0
7
4/
4
/0
7
$95,000
4/
3
$102,000
In which company is the total value of your shares greater? Explain how you
know which is greater.
Your team wants to invest $4,000 of its portfolio in companies that develop
recycling facilities. The team wants to split the $4,000 equally among five
companies. One team member wants to buy Casella Waste Systems (CWST).
The company is selling its stock at $16 per share. How many shares can your
team afford to purchase?
What is a Stock?
Math Behind the Market Beginner Sample
6
Company B
Company A
10%
25%
1
2
75%
90%
The two graphs represent your ownership in two companies (Company A and Company B).
Which graph represents the company that has 20 shares in which you own 5 shares?
Which graph represents the company that has 1,000 shares in which you own 100 shares?
What is a Stock?
Math Behind the Market Beginner Sample
7
Lesson Objectives
NCTM Standards
1A - Understand numbers, ways of representing numbers, relationships among numbers, and
number systems.
1B - Understand meanings of operations and how they relate to one another.
1C - Compute fluently and make reasonable estimates.
2A - Understand patterns, relations, and functions.
5C - Develop and evaluate inferences and predictions that are based on data.
6A - Build new mathematical knowledge through problem solving.
6B - Solve problems that arise in mathematics and in other contexts.
6C Apply and adapt a variety of appropriate strategies to solve problems.
7C - Develop and evaluate mathematical arguments and proofs.
8A - Organize and consolidate mathematical thinking through communication.
8B - Communicate mathematical thinking coherently and clearly to peers, teachers, and
others.
9B - Understand how mathematical ideas interconnect and build on one another to produce a
coherent whole.
9C - Recognize and apply mathematics in contexts outside of mathematics.
10B Select, apply, and translate among mathematical representations to solve problems.
Mathematical Strands
Thinking
Algebraically
Interpreting
Statistics
Communicating
Quantitative
Information
Tackling
Complex
Problems
THINKING ALGEBRAICALLY
Use the formula below to determine the answer to each question. Unless stated
otherwise, the dividends are paid annually. The first question is done for you.
Show all work in the space provided.
Dividend Payment = (Dividend Per Share) x (Number of Shares)
1. Jonathan has 50 shares of a stock that is paying $0.12 in dividends per share
annually. What will his total dividend payment be?
Example: 50 x $0.12 = $6.00
2. Cecilia owns 85 shares of a stock that is paying a $0.30 dividend annually.
What will her total dividend payment be?
3. Darius has learned that his 120 shares of stock will be paying a $0.27 annual
dividend. How much money should Darius expect to receive in a dividend
payment?
4. Deondra owns shares of a company that will pay $0.33 per share in dividends.
If Deondra owns 350 shares, how much will her dividend payment be?
THINKING ALGEBRAICALLY
5. Christopher owns 430 shares of a stock that will pay a $0.22 dividend this
year. His brother, Wayne, owns 510 shares. How much more money in dividend
payments will Wayne receive than Christopher?
6. Tiffany bought 3,400 shares of a stock that will pay $0.18 per share in
dividends. She wants to use her money to purchase a new computer for $620.
Will she have enough money? (You can ignore commission.)
7. Jarren received a total dividend payment of $160.00 for the 80 shares of stock
he owned. How much was the dividend per share?
INTERPRETING STATISTICS
Below is a chart that shows the earnings per share for three different companies.
Use the information provided in the chart to answer the questions below.
Earnings Per Share
$32
$30
$28
$26
$24
$22
$20
$18
$16
$14
$12
$10
$8
$6
$4
$2
$0
Company A
Company B
Company C
INTERPRETING STATISTICS
4. Which company shows the least earnings per share?
5. What is the difference between the company with the greatest earnings per
share and the company with the least earnings per share?
6. Based on the information above, which stock would you prefer to buy? Why?
Stock B
is a stock in the consumer goods industry.
It costs $45 per share. Stock B also awards
quarterly dividends of $1.25.
Your client is confused because he has never heard of a dividend. Answer the
questions below.
1. In what ways are the two stocks similar?
3. Write a short letter to your client explaining how dividends work, and what it
would mean if he invested all his money in either stock A or stock B.
4. Do you know for sure which stock is a better investment? Why or why not?
2. On January 23, 2007, Jovian bought 400 shares of Intel Corporation (INTC) at
$20.00 per share. He sold half his shares on February 6, 2007 at a price of
$21.00 per share.
Ignoring any brokers fees, how much money did he gain or lose on this
investment?