The Bull Market
A Stock Market Simulation Activity
Activity Summary:
In this activity, students will participate in a simplified, simulated stock market which is
set up to crash. It is important, however, that they not know the market will crash,
because this will somewhat defeat the purpose of the exercise. The people who invested
in the stock market in the 1920s did not anticipate the crash, so the students should not
either. Because of this, the activity will be most effective if conducted as an introduction
to a lesson on the Great Depression. The objective of this activity is to make students
identify and understand the causes and effects of the stock market crash of 1929, thus
leading to a better understanding of the Great Depression era.
Subject:
Social Studies and/or Math
Grade Level:
Target Grade: 7
Upper Bound: 8
Lower Bound: 6
Time Required: About 1 hour
Activity Team/Group Size:
The activity is designed and recommended for up to 30 students in groups of 2 or 3.
Materials:
 3 helpers - stock market worker, banker, general helper
 pennies (20 pennies per group + 1000 pennies for the banker)
 individual candies (Starbursts, M&Ms, skittles, etc.)
 activity worksheet (one per group)
 calculators (for the helpers and students if they need them)
 graph paper (one per group)
Authors:
Undergraduate Fellow Name: Ryan Newman, Ekta Saheba, Amanda Clauson
Date Submitted: 6/30/05
Date Last Edited: 6/30/05
Parent Lesson Plan(s):
This activity is designed to accompany the Raccoons, Robbers, and Radios curriculum
module produced by the PEER program (http://peer.tamu.edu). However, it could easily
be conducted without the module, as an introduction or activity to go along with a Great
Depression unit.
Preparation:
Two to three outside helpers will be needed: one stock market worker, one banker, and
one general helper. Two would be sufficient, however, three helpers (teachers, aides,
etc.) would be ideal. Each group is given their 20 pennies, a worksheet, and graph paper.
Activity Introduction:
The activity could be introduced by asking the students some general questions about
what they know about the stock market, loans and interest. This information will help
them have a better understanding of what is going on. Enough basic information is
offered in the activity itself, but some discussion of the ideas may be necessary. It should
be explained to the students that a prize (i.e. candy) will be offered to the winner or to
whoever has enough money at the end of the activity.
Activity Plan:
1. Each student should be given 20 pennies, the activity worksheet and graph paper.
2. Students should be explained the following: "The stock market is a place where
you can buy sections (stocks) of companies. As companies sell more of their
products, (Pixar makes movies, Wal-Mart sells goods, Cingular sells phones, etc.)
their company value rises, causing the value of the stocks to go up too. Ideally,
you want to buy more stocks of a company when prices are getting higher so
when they do get higher, you can sell them at a high price and make money. You
want to sell stocks as the price gets lower, because the stocks are losing value, and
you are losing money. However, the stock market can be tricky, and goes up and
down daily. The bank has pennies it can loan you to help you purchase more
stocks if needed. You have 20 pennies to start with, and your goal is to invest
well so in the end you end up with more money. I will be posting stock values on
the board every 2 minutes. Every 1 point increase means each single stock is
worth one more penny. For example, stock equaling 1 is valued at 1 cent, stock at
5 is worth 5 cents. The graph paper is to use to graph what is happening on the
market. Graph each point to keep track of the trend the market is taking."
3. Tell students that they should try to make a profit with the market because they
will be able to ‘buy’ prizes with the money they make.
4. The banker should be set up somewhere towards the back of the room. The stock
marker worker will post the numbers on the board at each given time. The general
helper will need to walk around the room and assist the students with any
calculations or questions they may have. Each teacher or aide should be equipped
with a calculator.
5. For each number written on the board, the students must make a decision to either
buy, sell, or stay with the stocks they have. Anytime they buy or sell stocks, they
must bring their worksheet up to the stock market worker. They will inform the
worker how many stocks they want to buy or sell, and the worker will make sure
that their calculations are correct. For example, if a student wanted to buy five
stocks at 5 cents a piece with 20 pennies, the worker must correct their
calculations. The worker will then write on the students’ worksheet how many
stocks they want to buy in the corresponding column. The remaining columns
need to be filled out by the student.
6. Anytime the bank's services need to be used, one of the students in the group may
go to the bank and borrow money for purchasing stocks. This also must be done
within the allotted two minutes, so remind the students that they need to make
decisions quickly. Ringing a bell every time a new number is posted helps keep
the students on track. The banker will keep running totals on how much money
each group borrows on a sheet of paper.
7. Begin by writing the first number on the board (5). Continue to post the following
numbers on the board (in the order shown) every two minutes until all numbers
are posted: 5, 3, 5, 6, 12, 10, 26, 21, 30, 38, 50, 28, 0.
8. As each number is written, students will buy, sell, or go to the banker to borrow
money (as needed). The banker will keep track of how much money each group
is borrowing (to be totaled at the end). No real money will be exchanged, the
banker just keeps track of money asked to be borrowed.
9. As stock values are given and students take action, the general helper will walk
around the room helping students fill out their corresponding worksheets.
10. At the end of the activity, the students will fill out the last row of boxes on their
worksheet. They will match their debts with what the banker has tallied up, and
calculate their total profits.
11. At this point, many students will have a negative profit, some will have a very
low profit, and very few will have made a lot of money.
12. If any of the groups owe the bank money, they must pay it back using the 20
pennies they were given in the beginning of the activity. If their debt is more than
20 pennies, the group just gives all 20 pennies back. Any group that makes
profits can go to the bank and receive as many pennies from the banker as profits
made.
13. Allow the students who have any pennies left to come back to the banker and
‘buy’ pieces of candy at a price of 10 cents/piece.
14. This activity is designed with the idea that most of the students will have a
negative profit. But if most of the students in the class end up making money, the
bank can then simply “run out” of money or candy. (Remember, the bank only
has 1000 pennies, so if many groups want more than available, or some groups
are not able to pay back their debt, the bank can no longer give out money or
prizes). This will demonstrate how the banks can also suffer when everyone wants
their money out all at one time.
15. If the students were not able to finish their graphs during the activity, allow a few
minutes for them to complete the graphs, with the stock market value on the yaxis and time (in minutes) on the x-axis.
Activity Closure/Assessment:
Have the students take their worksheet and get up to answer the following questions.
Designate a spot around the room for each answer choice, asking students to move to the
specific spot or side of the room if their answer corroborates with the choice. Possible
answer choices are included at the end of the question in parentheses. These questions
are interactive so the entire class can see how everyone did, and get a quantitative feel for
their end results.
1. Did your group end up losing money? (Yes, No)
2. How much money did your group end up with? (Less than 0, 0-50, 50-100, 100+)
3. At what time period would you have liked to stop buying stocks? (before 10,
before 20, at 20).
4. Why? (have someone actually explain why)
5. Could you have made a lot of money from this stock market? (Yes, No)
The rest of these questions can be answered sitting down and discussing as a class.
6. What happened to your money and stocks in the last few minutes?
7. The same thing happened in October of 1929. The market rose tremendously and
many people put much money in the stock market. (Ask the students to look at
their graphs, or use the one included). Did you or those people have any sign that
the market was going to crash?
8. How many of you are in debt because you lost so much money in the crash?
9. Do you still owe the bank money?
10. Why did the banks suffer as well in 1929 when the stock market crashed?
11. Do you think that something like this could happen again? Why or why not?
Learning Objectives:
7th Grade Social Studies TEKS:
7.13 (B) Analyze the impact of economic events in the free enterprise system
7.21 (H) Use mathematical skills to interpret social studies information
8th Grade Social Studies TEKS
8.30 (H) Use appropriate math skills to interpret social studies information
7th Grade Math TEKS:
7.13 (A) Identify and apply mathematics to everyday experiences
8th Grade Math TEKS:
8.16 (A) Make conjectures from patterns or sets of examples and non-examples
Technology TEKS:
6-8.1 (F) Perform basic software application functions
6-8.7 (B) Create and edit spreadsheet documents
Activity Extensions:
If the students seem interested in this type of activity, then an actual stock market
simulation might be appropriate, using the newspaper or online sources to find stock
prices for certain stocks and conduct some sort of contest in class to see who can make
the most money over a week or even a month.
Activity Scaling:
Since the activity uses a worksheet to help calculate all the information, some advanced
students might be interested in attempting to generate their own formulas and worksheets
from scratch. Teachers looking for a more difficult scenario could also add more stock
values to be given, and produce them more quickly (every minute or 30 seconds rather
than every 2 minutes).
References:
http://www.pbs.org/fmc/timeline/estockmktcrash.htm