Download Financial Institutions' Role in Creating Emergency Funds for Financial Markets and more Lecture notes Financial Market in PDF only on Docsity! 1 Lesson Overview Description In this lesson, students will learn how the financial system creates a place to match savers with investors and the role financial institutions play in facilitating savings and investment transactions. Students will also learn the importance of creating an emergency savings plan before embarking on an investment strategy. Using a sample scenario, students will adjust a budget to develop an emergency savings plan. Standards • National Standard in K-12 Personal Finance Education • Texas State Social Studies Standards • Texas State CTE Standards Dollars and Sense • Texas State CTE Standards Money Matters Instructional Objectives • Discuss the role of financial institutions and markets in saving and investing. • Explain the benefits of saving and investing. • Develop a strategy to save for an emergency fund. Time Required • One 45-minute class period. Materials Required • PDF slides • Copies of Handout 1: Guided Notes • Copies of Handout 2: Emergency Savings Save and Invest—The Role of Financial Markets Lesson 5 2 Lesson Procedures 1. Display slide 1. Tell students the topic of this lesson is financial markets and emergency savings. 2. Display slide 2. Review the instructional objectives for the lesson. 3. Display slide 3. Tell students they will explore how financial markets and institutions play a role in saving and investing. Suggested questions for student discussion: • Governments, firms and poeople borrow money for many purposes. What are some of them? Answers will vary but might include roads, bridges and military goods (governments); manufacturing factories, technology equipment and buildings (firms); and homes, cars and college (people). 4. Display slides 4–6. Review markets, financial markets and types of financial institutions. • A market brings together buyers and sellers for the purpose of exchange. • A farmers market is an example of a physical market. People who sell fruits and vegetables find consumers who wish to purchase. • Markets can be virtual. In virtual markets like eBay and StockX, transactions are completed electronically. • Financial markets are like consumer markets. Both facilitate the transactions for people who buy and sell something. Financial markets exist to match savers to investors. • Consumer banks offer services to individuals. These services include savings and checking accounts and loans. Consumer banks are also referred to as retail banks. • Commercial banks offer the same services to individuals as consumer banks but also serve businesses. • Investment banks offer financial services to individuals, corporations and governments. These include investment services and complex transactions such as initial public offerings (IPOs) and mergers and acquisitions. 5. Display slide 7. Have students brainstorm answers to the question: “When financial markets match savers to investors, who benefits?” Answer: Both savers and investors benefit. Classroom response strategy: • Have students record answers in their guided notes. 6. Display slide 8. Review the saving and investing chart and the investment pyramid. • Explain that the investment pyramid shows the relationship between risk and return. • When you are saving and investing, the amount of expected return is based on the amount of risk you take with your money.
