Investment Choices

In this Pull-Out, students consider three types of investments: currency-based, non-productive assets, and productive assets. In Activity 1, students determine annual rates of the return on gold investments (nonproductive asset) and then adjust those rates for inflation and taxes. In Activity 2, students calculate the percentage increase and/or decrease in gold prices over a variety of time periods. The concept of investment bubbles is introduced. In Activity 3, students compare growth in S&P 500 stocks (productive-assets investments) to treasury bills (currency-based investments). Activity 4 is an exercise set in which students can apply what they have learned in Activities 1-3.