Math Behind the Market

Teaching Math Through the Stock Market Game

By Mindy RobisonMindy.robison@canyonsdistrict.

org

Midvale Middle School

Accessing Lesson Planswww.stockmarketgame.orgLogin

In the ClassroomPublications

Show All Publications Listed by Name (Next) Math Behind the Market

Table of Contents

Before You Invest

Selecting Your Investments

Tracking Your Investments

At the End of Trading

Math Strands

Thinking Algebraically

Interpreting Statistics

Communicating Quantitatively

Tackling Complex Problems

Lesson Plan

Lesson Summary

Lesson Objective

NCTM Standards

Mathematical Strands

Sample Lesson PlansBefore You Invest

What is a CompanyPage 2: Thinking Algebraically

PercentagesPatterns

Page 3: Interpreting StatisticsOrderingPatterns

Page 10: Tackling Complex ProblemsRatiosDivision

Sample Lesson PlansBefore You Invest

What is a StockPage 12: Thinking Algebraically

IntegersAddition/Subtraction/Multiplication

Page 15: Communicating Quantitative InformationUnderstanding TablesGraphing

Additional Information

Don’t have to do all the lessonsEnrichments lessonsAnswer KeysMatch to State CoreFeel free to adapt and change

More Resourceshttp://my.uen.org/myuen/69301/2

This is my UEN site that has the following worksheets available.

Understanding Stock Prices

Target (TGT) Walmart (WMT)

Last Trade 46.02 49.08

Trade Time 10/2/09 10/2/09

Change .55 (1.18%) .08 (.16%)

Previous Close 46.57 49.00

Open 46.03 48.89

Day’s Range 45.73-46.54 48.84-49.34

52 wk Range 25.00-49.20 46.25-60.22

Volume 6,094,625 15,094,001

Avg Vol (3m) 8,358,320 17,048,100

Market Cap: 34.60 B 189.29B

P/E 16.60 14.39

EPS 2.77 3.41

Div & Yield .68 (1.5%) 1.09 (2.2%)

What Questions?Understanding Basic ConceptsPercentage Increase/DecreaseDifferencesPrice to Earnings RatioWhich Stock would you buy?

Another ResourceGo to Financeintheclassroom.org

Grouped into math lesson plans and activities by grade.

Lessons are simple, easy to teach, and meet the state core.

http://financeintheclassroom.org/

Stock Purchases & Commissionhttp://www.uen.org/Lessonplan/preview.cgi?LPid=25375

7th Grade MathematicsIncludes:

Power PointWorksheetAnswer Key

Determining Stock CostLets assume you have decided to buy

Hershey (HSY). The price is $39.91. You decide you want to purchase 100

shares of the company.To find out how much the stock will

cost you simply multiply the price ($39.91) by the number of shares (100) and you get: 39.91 · 100 = $3,991.00, but don’t forget about the commission!

Examples:You want to buy 500 shares of Ford, at the current trading

price of $12.41 per share.

Cost of the Stocks: 

500 · 12.41 = $6,205.00

Commission: 

.02 · 6,205.00 = $124.10

Total Price:

6,205.00 + 124.10 = $6,329.10

ExtensionsWhat would happen to the total cost of

the transaction if the 2% commission: Went up?

The total cost would be more.Went down?

The total cost would be less.When investing your own money do you

want high or low commissions?LOW – the transaction will cost less money. 

Price To Earnings Ratiohttp://www.uen.org/Lessonplan/preview.cgi?LPid=25290

7th Grade MathematicsIncludes the following:

Power PointWorksheetAnswer Key

Price To Earnings Ratio     

COMPANYSYMBOL

EARNINGS PER SHARE

PRICE #1

PRICE #2

PRICE #3

PRICE #4

Apple: AAPL

$5.72 $78.20 $115.23 $145.67 $190.55

78.20 ÷ 5.72= 13.67

115.23 ÷ 5.72= 20.15

145.67÷ 5.72=25.47

190.55 ÷ 5.72=33.31

What happens to the Price to Earnings Ratios if:The Stock Price Goes Higher? The Stock Price Goes Lower?The Earnings Go Higher?The Earnings Go Lower?

What Else?

Exponential Growthhttp://www.uen.org/Lessonplan/preview.cgi?LPid=24626

10th Grade MathematicsIncludes:

Power PointWorksheets (Growth & Decay)Answer Keys

Exponential Growth

Interest Rate 2 yrs compounded annually

2 yrs compounded continuously

20 yrscompounded monthly

20 yrscompounded daily

2%Formula: P(1+ r)t

$5202.00

Formula: Pert

$5204.05

Formula: P(1+r/n)nt

$7456.64

Formula: P(1+r/n)nt

$7459.04

Formula: A = P (1 + r/n)nt

P = Principalr = Annual Raten = # of times compounded per yeart = Number of years

Assume you have $5,000 to invest.

What Else?Talk about what happens when the interest rate changes.

Discuss the differences between the ways the interest is figured.

Help students realize how important time is to the equation.

Exponential Decay

DepreciationRate

Value after 2 years

Value after 5 years

Value after 8 years

Value after 10 years

10% $16,200 $11,809.80 $8609.34 $6973.57

Assume the car was purchased for $20,000

Formula: y = a (1 – r)t

a = initial amountr = percent decreaset = Number of years

What Else?Talk about what happens when the depreciation rate changes.

Talk about the values you will get 20 or 30 years out – does it make sense?

Discuss the pros and cons of buying new or used cars.

The Stock Market Game Studyhttp://www.finrafoundation.org/

web/groups/foundation/@foundation/documents/foundation/p119852.pdf

http://www.finrafoundation.org/web/groups/foundation/@

foundation/documents/foundation/p119855.pdf

The Stock Market Game Study

Students who played the game:Scored Significantly Higher on Mathematics Test

Scored Significantly Higher on Financial Literacy Tests

Score higher regardless of teacher implementation

The Stock Market Game Study

TeachersFinancial practices were influenced

Set financial goalsAnalyzed their risk toleranceRead the business section of the newspaperWatched financial programs

Resourceswww.stockmarketgame.orgwww.financeintheclassroom.orghttp://robisonlovesmath.wikispace

s.com/

My email: mindy.robison@canyonsdistrict.org