Economics and business levels 9 and 10

Lesson overview - investment and risk

This lesson is part of a Level 9 and 10 Economics and Business unit on investment. This lesson is focused on introducing students to the levels of risk associated with different investment types.

Victorian Curriculum - Economics and Business

Levels 9 and 10

Explain why and describe how people manage financial risks and rewards in the current Australian and global financial landscape (VCEBC023).

Learning intention

We are learning about the different types of investment and their risks.

Success criteria

I can assess the risks associated with different types of investment.

Extension ideas

Extend the success criteria (outcome): Develop an investment plan. It should consider the risks associated with different types of investment.

Lesson sequence

  1. Ask students to discuss the following: 
    • If you have money saved, what could you do with this money? What could you do if there was nothing you wished to purchase straight away?
    • What investment types have you have heard of (for example, shares, art, property, term deposits)?
  2. Summarise findings and key points from the discussion and display these.
  3. Think Pair Share: 'The earlier you start saving and investing the better. Why?'
    • Extension ideas: High-ability students could be paired together for this activity. 
    • They also could consider the strengths and weaknesses of the three things you can do with money (spend, save or invest). 
    • Pose a more provocative question or statement to high-ability pairs. For example: Investing is a form of gambling.
  4. Watch 'What is compound interest?' video (ABC Education)
  5. Ask students to brainstorm and note the differences and similarities between compound and simple interest. Construct a summary table to display.
  6. Explain the concept of risk versus return to students.
  7. Small group discussion using prompt: 'Which investment types have the higher risk and return? Which are more likely to be safer?' Students sort the investment types listed in the class brainstorm from activity 1 from lowest risk to highest risk.
    • Extension ideas: High-ability students could be grouped together for this task or asked to use the investment types listed in the class or brainstorm in activity 1 to develop a low risk investment plan.
  8. Watch 'Why investing can be risky' video (ABC Education).

Acknowledgement

This lesson plan is adapted from activities contained in the Victorian Curriculum and Assessment Authority's unit 'Financial Literacy and Investment' unit.