Investment Simulation: Diversifying for Profit

Activity Description

In this interactive simulation, students will be given an initial sum of $10,000 to invest in shares from three companies: Moon Pharma, SoftwareCon, and Concrete Constructions. Each company has a different risk level (Low, Medium, and High) and offers varying average returns.

Objectives:

• Risk Evaluation: Students will evaluate the risk profiles and historical performance of each company.
• Strategic Investment: Students will strategically allocate their funds across the shares to achieve a minimum profit of $20,000.
• Decision-Making Skills: This simulation helps students develop critical decision-making skills and understand the trade-offs between risk and return.

Key Learning Outcomes:

• Understanding Risk and Return: Students will learn how to balance risk and return in their investment strategies.
• Strategic Thinking: Students will develop strategic thinking and decision-making skills by evaluating different investment scenarios.
• Real-World Application: This simulation provides practical experience in investment planning and portfolio management.

This worksheet is designed to provide students with a hands-on, interactive experience in investment strategy, helping them understand the complexities of financial decision-making and the importance of balancing risk and reward in their portfolios.

This worksheet is a classroom-ready interactive and dynamic worksheet that just needs a few clicks to assign to your classroom. The worksheet is auto-scored, teachers just need to open the real-time console and monitor the student progress.

Learning Objective

In the next worksheet activity, students will be given $10,000 to invest in three shares with different risk levels: low, medium, and high. They will decide how much to allocate to each share and then start a simulation that shows how their investments grow over 15 years in a graphical format. The simulation will illustrate that the high-risk share's value, despite rising in the first five years, will drop by the end of the period. Conversely, allocating money to the medium-risk share would result in the highest overall profit, achieving a target of $20,000 by the end of the 15 years. This activity aims to teach students the importance of diversification to manage risk, the impact of different risk levels on investment returns, and the importance of strategic asset allocation to achieve long-term financial goals.

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