# The Mathematics Behind the Stock Market

Introduction

The economy plays a central role in our lives. Whether we realize it or not, we interact with the economy everyday. Every purchase we make and every service we request has an effect on the economy. The stock market allows us to measure these changes in the economy by calculating what goods and services are being provided across the country. In this webquest, we will start to build a deeper understanding of how the stock market works. We will also be looking at how mathematics interact with the stock market and how we can use mathematics to explore the economy on a deeper level.

For this webquest, you will need to understand how the stock market works. We will be using various online resources to learn more about the stock market and to hopefully discover some new vocabulary terms along the way.

We will then look at how mathematics relates to the stock market. We will use real stock data to analyze various stocks and stock indexes. We will use this data to find statistical trends and form various conclusions based on the data.

Process

Review the resources, then complete the questions below. You may work alone or in small groups (2-3 students per group).

Introductory Resources

https://www.investopedia.com/terms/s/stockmarket.asp

https://www.nerdwallet.com/article/investing/what-are-stocks-how-they-work

https://www.thebalance.com/investing-lesson-1-introduction-to-the-stock-market-356170

Stock Market Data Resources

Questions:

1. Did the NASDAQ increase or decrease over the last 12 months? Describe the rate of change in terms of percent.

2. Look at the price changes that have taken place in the NASDAQ over the last 5 years. What is the average rate of change during this period?

3. Did the S&P 500 (SPY) increase or decrease over the last 12 months? Describe the rate of change in terms of percent.

4. Look at the price changes that have taken place in the S&P 500 over the last 5 years. What is the average rate of change during this period?

5. Compare the NASDAQ and the S&P 500 over the past 5 years. Which one has grown more over this time period? Why do you believe that the two indexes have not changed at the same rate?

6. What is the company’s stock ticker?

7. What is the current stock price?

8. What is the 52 week range?

9. By what percent has the company’s price increased or decreased over the past year? How much has it changed over

the past 5 years?

10. Do you expect this company to increase or decrease over the following year?

Evaluation

The webquest assignment is worth 100 points. Each of the questions are worth 10 points a piece. Since there are 10 questions in total, you can earn a maximum of 100 points. For each correct answer you submit, you will earn 10 points. For each incorrect answer you submit, you will receive zero points. If you receive partial credit on a question, you will receive 5 points. You can receive partial credit if you have the correct number that is in the wrong form, or if the question has multiple answers and you get at least one correct.

Incorrect        Partially Correct      Correct

Question 1               0                        5                        10

Question 2               0                        5                        10

Question 3               0                        5                        10

Question 4               0                        5                        10

Question 5               0                        5                        10

Question 6               0                        5                        10

Question 7               0                        5                        10

Question 8               0                        5                        10

Question 9               0                        5                        10

Question 10             0                        5                        10

Total Points:              __/100

Conclusion

After completing this webquest, you should have a basic understanding of what the stock market is and how it works. You should also understand some of the mathematical principles that are used to analyze the stock market. This assignment should serve as an example of how you can use geometry and statistics in your own life.

Credits

This WebQuest was created by Gregory Mellinger.