Math-in-CTE Lesson Plan Template
Lesson Title: The Stock Market
Author(s):
Charlie Krajewski
Lesson #28
Phone Number(s):
Joanna O’Donovan
E-mail Address(es):
ckrajewski@wnyschools.net
jodonovan@wnyschools.net
Occupational Area: Business/Technology
CTE Concept(s): Understanding how the stock market works, analyzing historical prices and calculating PE ratios.
Math Concepts: Calculate return on investment using adjusted closing price factoring in splits and dividends. Calculate % gain and
loss. Calculate the PE ratios of companies.
Lesson Objective:
SWBAT Calculate their return on investments and PE ratios.
Supplies Needed:
Calculators, pencils, computers & the Internet
THE "7 ELEMENTS"
TEACHER NOTES
(and answer key)
1. Introduce the CTE lesson.
Ask:
Before beginning the teacher should briefly explain how the stock
What types of products and services do you use? Are you familiar with market works.
the company that makes these products? How successful are they?
If you had extra money to invest in stocks what companies would you
select and why? Take a look at yahoo finance and look up the price of
Apple stock. The symbol is AAPL.
Yahoo Fantasy Finance stock simulation , Create an account using
Have students create a stock portfolio using Yahoo finance. They can the hyperlink
track their positions on a daily basis to see their gains or losses.
Students should explain their reasons for selecting each company.
2. Assess students’ math awareness as it relates to the CTE
lesson.
Nike’s current price 103.46 (2-7-12).
Price (1-2-06) was 85.95
Have students look up the price of Nike (NKE) stock. Have them
Most students will come up with about $116 shares purchased with
calculate how many shares they could purchase with $10,000 on
the $10,000. Current value would be $12,001.36
January 3, 2006. Ask them how much they would make or lose on their This would show a gain of 2001.36
investment.
Ask:
Q1: What is a stock split?
Q2: What is a dividend payout?
Q3: Why is the adjusted closing price different than the regular closing
price?
Q4: What is the PE ratio?
A1: Stock Split
A2: Dividend
A3: Adjusted closing price factors in stock splits and dividends paid.
The Adjusted price for NKE was 39.15 on 1-3-06
A4: The P/E ratio (price-to-earnings ratio) of a stock (also called its
"P/E", or simply "multiple") is a measure of the price paid for a share
relative to the annual net income or profit earned by the firm per
share.
3. Work through the math example embedded in the CTE lesson.
http://www.mathgoodies.com/lessons/percent/change.html
Use the mathgoodies link for students to work through % change
Q1: Using the above pricing for Nike Stock on (1-2-06) of $85.95 and
$103.46 on (2-7-12) what is the percent gain in the price?
Look up symbol for Nike (NKE) in yahoo finance. Use the historical
data tab to see prices.
Q2: What percent did Nike increase from its adjusted closing price?
A1 103.46-85.95= 17.51/85.95= 20.37%:
Q3: How much would your initial investment of $10,000 approximately A2: 103.46-39.15= 64.45/39.15= 164.62%
be worth today using the adjusted % increase?
A3: $10,000 * 164.62%= 16,462
Q4: Calculate Nike’s PE ratio using price of $103.46.
$10,000 + $16,462= $26,462
Complete the PE ratio worksheet
A4: 103.46/4.67= 22.18
PE Ratio Worksheet
4. Work through related, contextual math-in-CTE examples.
Q1: Use the company you chose to research for your Business Quest. A1: Student should first find out the adjusted closing price that day
Figure out approxiamtley how much a $10,000 investment on your the regular closing price that day and also today’s closing price.
birth date would be worth today.
Then calculate the percentage increase from the adjusted closing
price to the current price (same as Q3 & Q3 in above problem).
5. Work through traditional math examples.
Percent’s worksheet 1
Percent’s worksheet answer key
6. Students demonstrate their understanding.
Students should find the adjusted closing price of each stock on
Choose three other stocks and calculate what a $10,000 investment in January 3, 1995. Next they find today’s current price and calculate
each company on January 3rd 1995 would be worth today? Make sure the percent increase. Multiply the % increase or decrease by the
to follow the proper steps and use the adjusted closing price.
$10,000 initial investment to find the profit/loss.
Answers will vary
7. Formal assessment.
Answers are included with quiz
Quiz on percent’s and ratios