New Brunswick Middle School

New Brunswick, New Jersey

Preparing Today for a Better Tomorrow

Stock Market Project 2005-2006

Due: Friday, June 23, 2006

 How the stock market works
Lets say you hear a tip that McDonalds is coming out with a brand new product that is
supposed to double their business. You think to yourself, "Darn, I wish I owned that
company." Well you can. McDonalds, along with thousands of other companies, lets the
public buy part of its company. It does this through selling shares. A share is simply a
piece of paper that says you own part of a company. This part is usually extremely small,
perhaps thousandths of a percent of the total company, but, hey, it is a beginning. You
decide you want to buy part of McDonalds. You run home, and count up all of the money
you have been saving, and find out you have 250 dollars. Well you are not going to be
able to buy the whole company, but it is a start.

You've got the money, you know what stock you want to buy, now what? Do you go to
the grocery store and ask for a dozen shares of McDonalds. Not exactly, but close. You
don't go to a grocery store, but rather you call a broker. A brokerage house is your
supermarket of stocks. You call up any broker and say, "Charles, I've got 250 dollars, and
want to buy as much McDonalds as I can."

Charles in return tells you, "Let's see, a share of McDonalds costs 20 dollars (Not the
actual price), and I am going to charge you 50 dollars for my services, so you can buy 10
shares of McDonalds. " You then give Charles the money, and you get the stock. (They
usually don't give you the paper stock certificates, but they transfer ownership over to
you.) Voila, you have just bought stock in a company!

Sounds simple enough, right? Actually it is not if you look at it from the broker's point of
view. When you told the broker you wanted those 10 shares of stocks, he did not
magically buy them for you, or already own them. Rather, he sent a message to another
person who is working down on the floor of the New York Stock Exchange (or any other
stock exchange). He tells this person to buy these stocks for you. This person is called a
"Floor Broker."

Now this person goes to the part of the Stock Exchange that is allotted to this particular
stock. Here there are companies that specialize in this stock. This means that they will
usually, if not always, buy and sell from people at the normal price. The floor broker then
buys your ten shares from one of these people, reports his trade through the hundreds of
computers on the floor, then reports to his colleagues back at the brokerage house that he
bought the stock. The broker keeps a record that you own that stock, rather than sending
you the actual paper stock certificates. If you ever want to sell them, your broker will sell
them, deduct his commission, and then give you the money.
Got all that? Well if you did not, here it is again using a simplified example. When you
want a stock, you call a broker. The broker calls a person on the floor (usually an
employee of the broker). This person runs to the space that is allotted to this stock. He
then buys the amount of stock from the specialists, or companies, that are there to sell and
buy on a regular basis. He then tells the firm he bought it, and then you have your stock.

Objectives
Use the mathematics taught this year.
Work cooperatively in groups.
Explore buying stocks as investments.
Apply decimals and fractions.
Use charts in problem solving.
Learn to create tables, charts, and line graphs based on statistical data using a
computer.
Interpret charts, drawing conclusions about the data.
Present data, charts, and conclusions in an organized technical report following a set
format.
Present data, charts, and conclusions in front of the class in a format of your choice.
Develop a basic understanding of the use and operation of Microsoft Word and Excel.

Important Due Dates

Friday, May 12th Weekly Progress Report Due At the beginning of class.
Friday, May 19th Weekly Progress Report Due At the beginning of class.
Friday, May 26th Weekly Progress Report Due At the beginning of class.
Friday, June 2th Weekly Progress Report Due At the beginning of class.
Friday, June 9th Data Collections ends and assembly of project starts.
Friday, June 12-16th Work on project and presentation continues.
Friday, June 23th FINAL PROJECT SUBMISSION AND PRESENTATION.
 Basic Project Description
You have been assigned partners to act as investment clubs. Each individual has been
given $10,000 to divide amongst 4 stocks. Your investment club must agree on 4 stocks
to purchase. Each member of the group must purchase the same 4 stocks, but you may
not purchase the same amount of a stock as another member in your club. You each have
$10,000 to invest, make sure you each invest in all six stocks, and you each distribute
your funds differently among the 4 stocks. You will each be submitting different reports,
though you will be presenting to the class as a group, and are partnered so you can help
each other as needed. Your grade will be a combination of your individual and group
work. company name,
stock symbol, a brief description of the company and its ties to Cincinnati, and why you
want to select this company. (You may want to ask your parents if they work for a
company that is publicly traded, and choose their company as one of your stocks to
purchase.) You will be collecting data between May 5 June 9.
Project Deliverables (what to turn in)
Stock Choices and fund distribution due Monday, February 6th, 2006.
One-page per group listing:
The Investment Club Name and Group Number.
The six stocks the group has chosen, and their trading symbols.
A brief (one to two sentence) description of each stock (company.)
The names of the investment club members.
The current price of each stock (per share), (closing price on Wed., February 1st.)
How many shares of each stock each member of the group is purchasing, and
how much this will cost per person, per stock.
These choices will be typed on the form at the end of this packet.
Collect at least three closing prices for your stocks each week throughout the project.
Your data will be more accurate, and you will be able to make better conclusions (perhaps
earning a better grade) if you record the closing prices for your stocks each day of the
week (5 per week per stock.) Record the prices in a table, either by hand, and in Excel
each week. At the end of the project, you must have these prices recorded in an Excel
spreadsheet and will use the data to create your graphs. Make sure you record the date for
each quote (the date of the closing price, not the date you checked the internet for the
data.)
Weekly portfolio values due Fridays
One-page per group listing:
The Investment Club Name.
The names of the investment club members.
The value of each investment club members portfolio these values must be from the
closing prices on Wednesdays market. (Note that the NYSE closes at 4pm, so
Wednesdays closing prices can usually be found online Wednesday evening, in the
paper Thursday, and online Thursday listed as yesterdays closing price.)
The total value of the investment clubs holdings (based on Wednesdays closing
prices).
 Average holdings per member. (Take the total for the group, and divide by the number
of people in the group.)

Project Report due Friday, June 23 (Each student will submit their own
report.):
o Title Page, with report title, your name, date, bell number, investment club name, and
group
number.
o Table of Contents & List of Figures.
o Introduction one to two paragraphs describing the project.
o Description of Stocks - For each of the six stocks you purchase, you must have:
A minimum of one paragraph describing the changes in the stocks performance over
the project timeframe. Include an explanation for significant changes. (These
justifications can often be found in news releases.) Make sure you include the initial and
final values of your stock (per share, as well as how much your shares were worth when
purchased and then at the end of the project.)
A minimum of one paragraph explaining whether (in your opinion) this was a good
stock to purchase or not, and why. (Research the performance history of the stock; this
may help you to answer this question.)
A line graph (for each stock) showing the changes in the value of your shares over the
course of the project. Make sure all your graphs have a figure name and number below
them. Make sure your figures have titles, and appropriate x- and y-axis labels. When you
are describing the stock in your body text, you may want to refer to the graph showing
the stocks progress, make sure to refer to it by figure number. Make sure to discuss the
graphs in your report.
A line graph showing the progress of all six stocks on the same graph, and an
explanation/interpretation of this graph. Use the per share data, not your total value for
this graph.
Note: We will be working on the graphs together in the computerLab.
Explain the overall changes in your portfolio. Did you make money or lose money?
How much? What factors contributed to these changes? Discuss each of the following
graphs:
A line graph showing the progress of all six stocks on the same graph. Use the total
value of your stocks for this graph, not the per price data.
A line graph (for each stock) showing the changes in the value of your shares over the
course of the project. Make sure all your graphs have a figure name and number below
them. Make sure your figures have titles, and appropriate x- and y-axis labels. When you
are describing the stock in your body text, you may want to refer to the graph showing
the stocks progress, make sure to refer to it by figure number. Make sure to discuss the
graphs in your report.
A line graph showing the progress of all six stocks on the same graph, and an
explanation/interpretation of this graph. Use the per share data, not your total value for
this graph.

o Reference List
List the resources you used while working on your project, including web pages,
newspapers, journals, and magazines. For formatting examples, see the listing in the
Computer Lab, in the Library, or on Mrs. Cottons web page. Make sure your company
descriptions have this information included each week. When you finish your report,
copy these references into the reference section, and delete them from the body of the
report.
Group Presentations in class Friday, June 23, 2006
o 10-minute presentation in class explaining your groups project.
Your presentation should explain which companies you chose, how they performed,
and
what you learned from this project.
o Every group member must participate.
o Get creative you have lots of freedom on how you want to present you could make
up a skit
o Start thinking about your presentation early, you dont want to throw something
together at the last minute.
List of Figures
(make sure titles reflect your stocks)
Figure 1: stock 1 changes over time
Figure 2: stock 2
Figure 3: stock 3
Figure 4: stock 4
Figure 5: the value of your six stocks on one graph (per share
values)
Figure 6: the value of your six stocks on one graph (total holdings
values)
Figure 7: your portfolios value
Figure 8: total investment club holdings
Figure 9: comparison of individual holdings with average
investment club holdings
Reference Sheet Example:

Standard Bibliography Style Sheet 7th and 8th Grade

Book
Anderson, J.B. Surfing in Hawaii. New York: Marine Press, 1995.
Encyclopedia Article Author Not Given
Gaius Julius Caesar. Encyclopedia of World Biography. Detroit: Gale, 1998.
Encyclopedia Article Author Given
Joes, Anthony James. "Rome." World Book Encyclopedia. Chicago: World Book
Inc.,
1997.
Almanac
Population of the Worlds Largest Cities. The World Almanac and Book of
Facts.
Mahwah, N.J.: World Almanac Books, 2001.
Atlas
Goodes World Atlas. Chicago: Rand McNally and Company, 1986.
Magazine Article
Stein, Bart. "Caught in the World Wide Web." National Geographic World. June
1997:
24-25.
CD ROM Encyclopedia
Microwave Ovens. The Way Things Work. CD-ROM. Dorling Kindersely, 1994.
Website
Classics Collections. 2003. University of Florida. 10 September 2004.
http://web.uflib.ufl.edu/cm/classics/
Encyclopedia Britannica Online
"Rome." Britannica Student Encyclopedia. 2004. Encyclopdia Britannica Online
School Edition.10 Aug. 2004 <http://school.eb.com/ebi/article?eu=298881>.
Internet Magazine Article
Wertman, Danny. Mark Twain. The Advocate 13 January 2002: p. 12. In
NewsBank,
May 9, 2002.
If a book or other material does not have an author, use the title or shortened
form of the title in place of the author's last name. One-page articles and
encyclopedia articles do not need page numbers.
If you wish to use formal bibliographic format, you may wish to list sources on a
separate page with the heading "Bibliography."
Sample
Page 4 of 14
Description and Analysis of Stocks
Stock 1: Cotton Music Company, Inc. (CMC)
Brothers Michael and Chris Cotton founded Cotton Music Company in 1992. Born to a
talented singer for a mother, both Michael and Chris found an early love for music. By
their high school years in the 1980s, they had each learned to play multiple instruments,
and were becoming especially fond of string instruments, but were frustrated by the
frequent and time consuming tuning required. In college, Michael combined his
education in engineering with his love of music to create the Auto-Tuner, a device that
measures the pitch of each string (on a violin, cello, bass, guitar, etc.) and turns the pins
until the correct frequency is found. He enlisted his brother Chris, who was teaching at a
local conservatory in 1992, to help him pitch his auto-tuner to other teachers and
performers. The tuner was an overnight hit, though the original prototype was large and
cumbersome. After hiring additional engineers to refine the original design, the brothers
marketed the now hand-held tuner to adult performers and music schools in several
neighboring states. By 1996, the brothers tuner was being sold to a younger audience;
childrens music teachers were starting to use the tuners to minimize the tuning time
and increase the play-time in their orchestra classes. The Cotton brothers had been
outsourcing the production of the tuners until 1997 when they went public, after
recognizing they needed additional funding to open their own factory, making the auto-
tuner affordable and easily available. Cotton Music Company now has two production
plants in the Midwest, 1100 employees, and manufactures and sells a wide variety of
musical supplies both direct through their website and through music stores across the
country, but theyre still best known for their auto-tuner.
Cotton Music Company History. 2004. Cotton Inc. 11 February 2006.
http://cottonmusic.com/history/
Is it a Worthwhile Mathematical Task?
The teacher of mathematics should pose tasks that are based on-
1. sound and significant mathematics;
This activity addresses the following:
Number, Number Sense and Operations Standard for Grades 8-10
(F) Explain the effects of operations on the magnitude of quantities.
Patterns, Functions and Algebra Standard for Grades 8-10
(C)Translate information from one representation (words, table, graph or equation) to
another representation of a relation or function.
(D) Use algebraic representations, such as tables, graphs, expressions, functions and
inequalities, to model and solve problem situations.
Data Analysis and Probability Standard for Grades 8-10:
(A) Create, interpret and use graphical displays and statistical measures to describe
data;
e.g., box-and-whisker plots, histograms, scatterplots, measures of center and variability.
(F) Evaluate different graphical representations of the same data to determine which is
the
most appropriate representation for an identified purpose.
Mathematical Processes Standard for Grades 8-10:
(A) Formulate a problem or mathematical model in response to a specific need or
situation, determine information required to solve the problem, choose method for
obtaining this information, and set limits for acceptable solution.
(B) Apply mathematical knowledge and skills routinely in other content areas and
practical
situations.
(C) Recognize and use connections between equivalent representations and related
procedures for a mathematical concept; e.g., zero of a function and the x- intercept of the
graph of the function, apply proportional thinking when measuring, describing functions,
and comparing probabilities.
(D) Apply reasoning processes and skills to construct logical verifications or
counterexamples
to test conjectures and to justify and defend algorithms and solutions.
(E) Use a variety of mathematical representations flexibly and appropriately to organize,
record and communicate mathematical ideas.
(G) Write clearly and coherently about mathematical thinking and ideas.
(H) Locate and interpret mathematical information accurately, and communicate ideas,
processes and solutions in a complete and easily understood manner.
2. knowledge of students understandings, interests, and experiences;
This stock market project is not one you would expect teenagers to care about. Because
of that,
the project was designed to create interest that might not have been there. Students are
encouraged to select stocks from companies they knew such as Nike, Coke, and
McDonalds..
3. knowledge of the range of ways that diverse students learn mathematics;
This project has many components. Students are able to learn from each other by
working in
small groups. The spreadsheets and graphs created by Excel provide both graphic and
numeric
representation of the data. Constructing the actual graphs allow for hands-on work for
the
tactile learner.
4. engage students intellect;
Most teens think they are ready to deal with the adult world, and this project allows them
to do
so. The monies they are dealing with are quite large, and the decisions they make are up
them.
Students can feel grown-up as they mange and discuss their investment strategies.
5. develop students mathematical understandings and skills;
This project deals with a great deal of data calculations and manipulations. Most of the
calculations are relatively simple, but they need to be made frequently. Students should
realize
technology allows them to do these frequent calculations more efficiently and potentially
more
accurately.
6. stimulate students to make connections and develop a coherent framework for
mathematical
ideas;
This project is all about applying math in the real world. It demonstrates that you need a
working knowledge of math in order to make sound financial decisions. Although it is a
big
project, it is broken down into small, manageable steps that students should be able to
follow.
The use of technology is designed to enhance the students understanding of basic
computational
skills.
7. call for problem formulation, problem solving, and mathematical reasoning;
This project is very clearly laid out for the student, and the problems the students will
answer
have already been formulated. Students do have to input their stock selections and solve
problems related to the group and individual investments.
8. promote communication about mathematics;
The final project report requires the student to describe their investment activities in
various
ways. They need to explain any changes to their original investment and how the change
was
calculated. They need to describe their investments as a percentage of the groups total
investment.
9. represent mathematics as an ongoing human activity;
The stock market is very much an on-going activity as todays hot tip is tomorrows old
news.
Students should realize that by being proactive (i.e., using their math skills) with their
investments, they can make more intelligent decisions about how their money is invested.
10. display sensitivity to, and draw on, students' diverse background experiences
and dispositions;
Although it appears this project was designed for middle class, suburban students, the
project
was designed to accommodate all students including those from lower socioeconomic
classes.
All students regardless of economic situations were given $10,000 to invest. Most
students,
rich or poor, dont have ready access to that much money, which minimizes the
importance of a
students economic status. Students were encouraged to invest in what they know. Many
students have brand loyalty already, and they could use that to make investment
decisions.
11. promote the development of all students' dispositions to do mathematics.
A student might think he/she cannot do math, but are keenly aware of his or her own
financial
situation. By using money in the project, most students tend to be more engaged. This
project
shows students how to manage a large data set without being overwhelmed by it. It also
promotes students to take ownership of their actions.