LEVEL 3a Investing 101

Multiple Choice

How to people profit off of reselling shoes? 

• They sell fakes

• They buy the shoes at a low price and sell the shoes at a higher price

• They sell them for the same price they bought them for

Multiple Choice

How do people profit off of the stock market? 

• Buying a stock at a low price and then selling it at a higher price

• Tricking people into buying their stock

• Forcing people to buy their stocks at higher prices

Open Ended

It can be hard to understand why stock prices go up and down all the time. They are similar in a way to concert tickets. 

Let’s say you go to buy tickets for a concert that is sold out. The only tickets available are ones that are being “resold”. Give me a 1-2 reasons why ticket prices might be GOING UP in price. 

Multiple Choice

For a concert, what are reasons why ticket prices go up or down?

• How popular the person performing is

• How much parking is available

• How big the city is

• The weather

Multiple Choice

How do stock prices go up and down in a similar way

• People might be a stock because it's popular, making the price go up

• Stock prices are completely unpredictable and cannot be explained

• Stock prices are like a roller coaster

• Stock prices are based on fake information

Open Ended

Explain one reason why stock prices go up and down

Drag and Drop

Stock Prices reflect what investors are willing to pay for a small slice of a company’s total ​

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. The total value of a company is found by multiplying the ​

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of shares times the ​

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price. 

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value

number

stock

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For example, in late November 2023 ​

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(AAPL) had almost 16 ​

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shares and each share had a price of $​

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. This means that the total value of Apple in late November 2023 was roughly $3 ​

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dollars. 

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Apple

billion

191

trillion

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Of course, that is a snapshot in time because share prices ​

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minute by minute! In the short term, the stock price of any company can be ​

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, going up and down influenced by ​

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and trends of investors. However, in the long run, a stock’s value is determined by a company’s profits and ​

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performance

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change

chaotic

emotions

actual

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Benjamin Graham, a successful ​

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, likened the market to a ​

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machine in the short term - a ​

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contest. Yet, in the long run, it’s more like a ​

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machine, accurately finding a company’s real value

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investor

voting

popularity

weighing

Multiple Choice

Let’s say you have $100 and packs of gum cost $1. How many packs of gum can you buy? 

• 100

• 10

• 50

• 75

Multiple Choice

Let’s say you have $100. A few years later, the same pack of gum costs $1.25. How many packs of gum can you buy? 

• 100

• 80

• 75

• 50

Multiple Choice

Let’s say you have $100. A few years later, the same pack of gum costs $2.00. How many packs of gum can you buy? 

• 100

• 75

• 50

• 25

Open Ended

Based on the gum example, what is happening over time to the amount of gum you can buy with $100? Why is this happening?

Open Ended

Explain how investing might help counter the effects of inflation

Drag and Drop

Compounding occurs when your investment ​

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is added to your account, forming a ​

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base on which future earnings can grow



As your investment base gets larger, it has the ​

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to ​

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faster. And the longer your money is invested, the more you stand to gain from compounding.

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earnings

larger

potential

grow

Match

Nerdwallet Compound Interest Calculator

Matching Activity: Use the Compound Interest Calculator to find the “Total Balance”, or the total value of your investments, based on the scenarios below:

Note1 : The stock market as a hole on average tends to return about 7% per year. 

Note 2 : “Contribution amount” just means the amount of money you put into the amount after you get started with the initial deposit into the account

• Initial Deposit: $5,000

  Years of Growth: 5

  Estimated Rate of Return: 7%

  Contribution Amount: $0

• Initial Deposit: $5,000

  Years of Growth: 10

  Estimated Rate of Return: 7%

  Contribution Amount: $0

• Initial Deposit: $5,000

  Years of Growth: 10

  Estimated Rate of Return: 7%

  Contribution Amount: $100 per month

• Initial Deposit: $5,000

  Years of Growth: 20

  Estimated Rate of Return: 7%

  Contribution Amount: $100 per month

• Initial Deposit: $5,000

  Years of Growth: 20

  Estimated Rate of Return: 7%

  Contribution Amount: $500 per month

$7,088

$10,048

$27,356

$72,286

$280,657

• $7,088

• $10,048

• $27,356

• $72,286

• $280,657

Draw

Calculate the return for each investment 

Remember, it is the $ return divided by the amount invested

Draw

Put a Red “R” for a loss and a Green “G” for a gain

Open Ended

Risk Assessment Quiz

Tell me the score you got and what this means. Also tell me if this feels accurate about you and explain why.

Match

Match each example scenario with the appropriate risk/reward  

• Putting your money into a brand-new app that promises quick profits

• Buying a well-known, stable company’s stock after doing some research

• Putting your money in a basic savings account at the bank

High Risk, High Reward

Moderate Risk, Moderate Reward

Low Risk, Low Reward

• High Risk, High Reward

• Moderate Risk, Moderate Reward

• Low Risk, Low Reward

Match

Match each example scenario with the appropriate risk/reward  

• Investing your money in a friend’s “get rich quick” idea

• Starting an online shop to sell things you make

• Babysitting or mowing lawns for steady but small pay

High Risk, High Reward

Moderate Risk, Moderate Reward

Low Risk, Low Reward

• High Risk, High Reward

• Moderate Risk, Moderate Reward

• Low Risk, Low Reward

Match

Match each example scenario with the appropriate risk/reward  

• Buying a random new cryptocurrency because it’s trending online

• Putting a little money into a mix of different investment to learn how they work

• Watching videos and reading about investment but only putting $10 into the stock market to get started

High Risk, High Reward

Moderate Risk, Moderate Reward

Low Risk, Low Reward

• High Risk, High Reward

• Moderate Risk, Moderate Reward

• Low Risk, Low Reward

Open Ended

Visualizing the S&P 500

Give me examples of at least 5 companies in the S&P 500 that you know about / have shopped at

Open Ended

What is the difference between index funds and mutual funds? 

Multiple Choice

Which has more diversification, meaning which type of investments spreads your money out more across many different companies? 

• Mutual Fund

• Index Fund

Open Ended

Why might it be a bad idea to invest in an individual company?

Open Ended

Why is it a bad idea to invest in individual company stock?

Multiple Choice

When you buy a U.S. Bond, what are you doing?

• Lending money to the government, which pays you back with interest

• Buying part ownership of the government

• Giving a donation that you don’t get back

• Paying a tax in advance

Multiple Choice

What makes index funds a good way to diversify your investments?

• They only invest in one company

• They include tiny parts of many different companies

• They guarantee a profit every year

• They only include government companies

Multiple Choice

How is a mutual fund different from an index fund?

• It only invests in government bonds

• It invests in one type or “sector” of similar companies

• It invests in every company in the economy

• It has no fees or expense ratios

Multiple Choice

What lesson did investors learn from the Enron example?

• Investing in one company can be very risky if that company fails

• The government guarantees all stock investments

• Energy companies are always safe to invest in

• Index funds are illegal to own

Multiple Choice

Which type of investment is generally the safest and most stable over time?

• Individual Company Stocks

• Mutual Funds

• Index Funds

• US Bonds

Match

Match the following description to the investment.

• You give the government money, they pay you back plus interest

• Hundreds and hundreds of companies are bundled together and sold as one stock. 

• Many similar companies are bundled together and sold as one stock.

• You buy a share of a company and become a part owner. You could make a lot of money if the company does well or lose a lot OR all of your money if the company does bad. 

US Bond

Index Fund

Mutual Fund

Individual Company Stock

• US Bond

• Index Fund

• Mutual Fund

• Individual Company Stock