Stock Market Project



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INTRODUCTION

You are in the real world now, and need to learn how to manage your money.  You will be put into groups of two and will be given $3,000 per month to live on.  You will use Microsoft Excel to set up a checking, savings, and an expense account.  This will familiarize you with the potential of spreadsheets.  Next, you will take extra monthly income and invest it in the stock market to see how much money you can earn.  How easy is it to make a fortune through online trading, and is it worth the risk?  Extra points will be given to the top group who has the most money left over at the end of the project.

WHAT DOES THIS HAVE TO DO WITH MATHS?

This project ties in with mathematics in many, many ways. It incorporates numbers and number sense into real world applications, aids in problem solving, and teaches concepts in investing and money management. Beyond mathematics, this project also incorporates topics such as statistics, economics, and business.

THE TASK

You will be divided into groups of 2, and each group member will choose the role of graphic designer/banker or mathematician.

• Graphic Designer/Banker:   Your role requires you to enhance the look of the spreadsheet.  This involves using the toolbars to make your spreadsheet attractive. You are also responsible for the format of the spreadsheet and to make the proper entries.  This includes the expense account, checking account and savings account.

• Mathematician:   Your role requires you to determine the proper formulas to enter into the spreadsheet, and to determine where they belong.

As a group, you will collaborate to complete this part of the project, and you will exchange information so each member understands how the overall spreadsheet works.  Also, as a team, you will research the stock market so you can make investment decisions together.  You will keep your individual roles during this part of the project in order to design the portfolio, make proper entries, and calculate stock gains and interest rates.

THE PROCESS

Requirements:

A) We will begin with the easiest part of this project first and set up an expense account with the following entries:  Rent- $750, Car Payment-$350, Phone-$50, Electric-$50, Auto Insurance-$75, Credit Card-$65, and Other-$300. Steps A, B and C should be completed on Sheet 1 of your Excel spreadsheet.

B)  Next, create a total column, and total up your monthly expenses.

C)   Now, create a chart or graph showing your monthly expenses in a format that is readable.

D)   With the above information, you will next set up a checking account on Sheet 2. For your checking account, you will receive two monthly paychecks of $1,500, one on the 1st and the other on the 15th of the month.  Your rent is due on the 1st, and all other bills are due on the 20th. Make sure to follow what a real checking register looks like.  I will be e-mailing everyone examples so that you can follow the format I used easily. 

E)   The checking account register should include a formula that automatically adds deposits and subtracts withdrawals or payments.  This involves including a single formula in the balance column.

F)   Set up your savings account under Sheet 3.  Once again, refer to your e-mail with given examples or the spreadsheet tutorials. Your savings account register should include a formula that automatically adds and subtracts deposits and withdrawals, and should include a formula that determines daily interest earned and automatically adds it to your balance.  Here is some more help:  Your annual interest rate is 1.5%, divided by 12 months gives you your monthly interest rate.  You should calculate your earned interest at the end of each month. Your balance column should add this earned interest. 

G)   After the above requirements have been completed, determine your extra monthly income. H)    Enhance your spreadsheet by showing currency, percentage, and date values where they should be.  Change the background or insert an image---be creative in your design.

Online Trading

1)   As a team, begin by researching the stock market---how to trade online, good versus bad stocks (risk), stock market terms, investing, etc...The more you know, the better.  You need to use the stock market websites provided to do your research, and to list the ones you chose when you turn in your first portfolio.  Keep your group roles as graphic designer/banker and mathematician for the set up of the portfolio only.

2)  Decide which stocks to invest in (a minimum of 10 choices), and design a portfolio. 

3)  Start investing your extra monthly income.  NOTE:  It might be a good idea to not invest all of your extra monthly income at once.  Set some of it aside in your savings account (remember, you earn 1.5% annual interest with your savings account).

4)  Over the remainder of the term, check how your stocks are doing regularly.  You may need to change your portfolio according to profits and losses.

5)   Turn in a copy of your original portfolio, and if it is necessary to adjust your portfolio, turn in a copy each time you change it.  Also, keep a biweekly record of the changes your stocks make.  Also, as you make your decisions on which stocks to invest in, list what resource sites you use to make your choices and track your stocks---use at least two resources to keep track of your stocks.

6)   If you happen to lose your money before your next month's expenses have been covered, you must wait before investing again (this is where your savings account comes in handy again---don't blow it all at once).  If you do lose all of your money before the next month's income is available to invest, each member of your group will be placed in other groups that are still active in their investments.  You will not participate in the group that you are placed in, you will watch and learn how they are investing their money in the stock market and will use this information when investing your next month's extra income.

RESOURCES

Edustock

Concepts of Investing

Investor Words

Stockmaster

YoungBiz

Bloomberg

Yahoo Finance

EVALUATION

Item |A* |A-B |C-D |E-F |Mark | |Expense Account |Basic set up done appropriately; total is accurate; chart or graph is in readable format. |Requirements are followed, but there are some inconsistencies.  |Minimum effort; in-accurate total; graph or chart isn't in readable format.

|No graph or chart; wrong total; in-

accurate entries.

|____ | |Checking and Savings Account |Proper entries are made; the format follows what real registers look like; formulas work properly; balances are correct; proper values are used. |Few inconsistencies; formulas work; balances are right; format doesn't exactly follow what a register looks like.

|Minimum job done;

inconsistent entries, formulas, set up; balances are not correct.  |Inaccurate entries, formulas, set up, balances.  Formulas don't work as they should; proper values aren't used.

|____ | |Researching the Stock Market |How much time is spent researching the stock market; quality of knowledge gained; turning in what online resources you choose to research. |Time spent researching the stock market isn't used to maximize productivity and knowledge. |Minimum time spent researching the stock market; 50% effort put in. Too few of resources used to research.

|Little effort made to spend time researching the stock market. Only 1 resource used.

|____ | |Portfolios and Investments |Portfolios are designed properly; changes are made according to how your stocks are doing; regular checking of how stocks are doing; turning in records on time and when changes are made. |Good portfolio set up; keeping an eye on your stocks somewhat regularly; consistently turning in records. |Decent portfolios; minimum job watching your stocks; not a lot of effort made to change stocks according to gains and losses; not turning in records when necessary. |Poor portfolio design; little effort watching your stocks; few portfolio records turned in. |____ | |

INDIVIDUAL REFLECTION

After completing this project, ask yourself these questions:

1)  What mathematical skills did you learn from this project?

2)  What was the reason for doing this project when it comes to managing your finances and banking?

3)  When it comes to investing your extra monthly income, is it a wise idea to dump it all into the stock market all at once? Why?

4)  What did you learn about the stock market, and what are the real life implications when it comes to investing your money?

5)  Were the online sources of information adequate in helping you make these decisions?

6)  What are the real life implications of this project as a whole?

7)  Reflect on how you did this as a group and what experiences you got from working in a group.

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