Alternative Assessment

Personal Financial Management

Stock Market Concepts - Summative Assessment
Presentation Date: 10/23/2014
Written Paper Due: 10/30/2014

Objective: The goal of this assessment is to determine your understanding of the concepts:

How do financially responsible individuals carefully consider the amount of financial risk that
they can tolerate based on their life stage and plan for changes in the economic cycles?

How do investors make appropriate investment decisions specific to their individual financial
goals?

How does a consumer choose between investment options?

How do financially responsible individuals create plans based on sound economic principles to
maximize their standard of living over time?

Colorado Standards Assessed:

Standard 3: Economics: Acquire the knowledge and economic reasoning skills to make sound
financial decisions (PFL).

Concepts and Skills: 5. Analyze strategic spending, saving and investment options to achieve the
objectives of diversification, liquidity, income and growth.

Role-Play Directions: (50 points, due 10/23/14) This will be your opportunity to act as the investor!
You will be assigned an "investor type" and you will be asked to demonstrate your understanding of
what types of investments would be appropriate for that investor to hold in their specific
retirement portfolio. You and I will participate in a role-play activity where I will present different
types of investments for your consideration and you will choose the asset allocation model that
would be most appropriate for your personal investment goals. The investment choices you make
should relate directly to the information provided in your "Investor Profile" handout and the
Personal Financial Management content covered during class.
Concepts included in your Investor Profile that I will be assessing so you can prepare for and to
consider in your "role play":
1. What is the level of investment risk the typical investor in this life stage would be willing to
tolerate? This concept will assess your understanding of the time value of money.
2. How does diversification help to balance the risk and return ration in a portfolio? This concept
will assess your understanding of the purpose and benefits to diversification.
3. What assets types can help to accomplish diversifying a portfolio of investments? This concept
will assess your understanding of the different types of investment choices, their risk levels and
objectives.

4. What kinds of investments are more sensitive to economic cycles in the market? This concept
will assess your understanding of how inherent cycles in the economy can affect the
performance of different investment types.

Written Paper Directions: (50 points, due 10/30/14)

This paper should be written prior to your role-play and will act as a resource to help you
prepare. The written portion of this assessment should explain your reasoning for the investment
decisions made relating to each of the (4) concepts presented in your role-play.
Answer each of the questions as completely as possible using your class notes, information
provided in handouts and the resources available on Blackboard. You are also welcome to ask me
for clarification on any concepts.
As the goal of this assessment is to determine your understanding of the concepts, you will
have a week to revise your paper based upon my feedback provided to you after the role-play. Your
successful understanding of the concepts and the ability to demonstrate that knowledge is our
goal!