Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Topic Overview
Topic Strategies and Management
E4: Resources Management – Features of Different Financial Products
Level S3
Duration 3 lessons (40 minutes per lesson)
Learning Objectives:
1. Understand the concept of financial products, 2. Introduce different types of financial products,
3. Understand the characteristics of different financial products, 4. Understand the operation of Hong Kong Deposit Protection Board, 5. Understand different types of insurance products and their usage, and
6. Understand the characteristics of shares, debentures, certificate of deposit, treasury bills, mutual funds and annuities.
Overview of Contents:
Lesson 1 Bank Deposits
Lesson 2 Insurance Products
Lesson 3 Other Financial Products
Resources:
Topic Overview and Teaching Plan
PowerPoint Presentation
Suggested Activities:
Class Discussion
In-class exercise
Case study
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Lesson 1
Theme Bank Deposits Duration 40 minutes
Expected Learning Outcomes:
Upon completion of this lesson, students will be able to:
1. describe different types of financial products, 2. explain the features of bank deposits, and
3. describe the operation of Hong Kong Deposit Protection Board.
Teaching Sequence and Time Allocation:
Activities Reference Time
Allocation Part I: Introduction
Teacher starts the lesson by asking students how to treat their red pocket money and then introduces the concept of investment.
PPT #2 – 3 5 minutes
Part II: Content
Teacher explains what are financial products and introduces different types of financial products.
Teacher explains the features of different types of bank deposits.
PPT #4 – 5
PPT #6 – 9
6 minutes
8 minutes
Activity 1: Group discussion
Students discuss in a group of 3 to 4 regarding the appropriate situation for various types of bank deposits.
Teacher goes through the answer with students and makes conclusion.
PPT #10
PPT #11
6 minutes
4 minutes
Teacher introduces Hong Kong Deposit Protection Board and describes its coverage.
PPT #12 - 15 9 minutes
Part III: Conclusion
Teacher concludes the lesson by reviewing the key points covered.
2 minutes
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Lesson 2
Theme Insurance Products Duration 40 minutes
Expected Learning Outcomes:
Upon completion of this lesson, students will be able to:
1. describe the nature, characteristics and functions of insurance, and 2. describe different insurance products.
Teaching Sequence and Time Allocation:
Activities Reference Time
Allocation Part I: Introduction
Teacher recaps the concept of investment. 2 minutes
Part II: Content
Teacher explains the reasons for buying insurance, followed by a brief introduction of different types of insurance.
PPT #2 – 4 8 minutes
Activity 1: Class discussion
Students are required to list different types of insurance products in HK.
Teacher goes through the answers with students and makes conclusion.
PPT #5
PPT #6
3 minutes
3 minutes
Teacher explains the major types of insurance products. PPT #7 – 10 12 minutes
Activity 2: Case study
Students discuss whether it is appropriate for the person in the case to develop an insurance plan.
Teacher goes through answers with students and makes conclusion.
PPT #11
PPT #12
5 minutes
5 minutes
Part III: Conclusion
Teacher concludes the lesson by reviewing the key points covered.
2 minutes
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Lesson 3
Theme Other Financial Products Duration 40 minutes
Expected Learning Outcomes:
Upon completion of this lesson, students will be able to:
1. explain and differentiate the features of shares, debentures and other financial products.
Teaching Sequence and Time Allocation:
Activities Reference Time
Allocation Part I: Introduction
Teacher recaps the concept of investment. 2 minutes
Part II: Content
Teacher introduces features of shares, debentures, certificate of deposit as financial products and explains their features.
Teacher describes the characteristics of financial products.
PPT #2 – 4
PPT #5
15 minutes
7 minutes
Activity 1: Group Discussion
Students are required to discuss their investment habit.
Teacher discusses with students about their investment portfolio, asks whether they are willing to take risk or not and reiterates again the relationship between risk and return.
PPT #6 8 minutes
6 minutes
Part III: Conclusion
Teacher concludes the lesson by reviewing the key points covered.
2 minutes
1
Teacher invites students to share. They may say they would buy something they have been longing for so long (then teacher can recap the topic of consumption patterns and see whether students know the items they want to buy are needs or just wants!) Some may say put into the bank or make investments, teacher can then describe the function of saving and other financial products.
2
Teacher explains to students ‘surplus cash’ means no more consumption is needed with the use of this cash. Teacher then directs students to think about what is investment.
3 4
5 6
Teacher may inform students that nowadays some banks (e.g. Hang Seng Bank & Fubon Bank) are paying interests for the money deposited in current account.
7 8
9 10
11
Teacher introduces Hong Kong Deposit Protection Board and describe its objectives and operations.
12
13 14
Bank failure is rare in Hong Kong. In case a bank fails and the deposits are eligible for protection, the DPS will compensate the depositors.
15 16
17 18
Teacher explains it is necessary for a business to buy insurance as part of their risk management policy. Some insurance policy is statutorily required for either a person or business e.g. motor insurance.
19 20
21 22
23 24
Teacher can explain some life insurances are not only be claimed when the insured deceased but with a function of saving that the insured can withdraw the sum when he/she is retired or in emergency.
25 26
27
Students are free to discuss and they may not have much ideas on insurance. Teacher should mention the function of insurance is a kind of protection and risk management technique. Sufficient protection is fair enough to cover any loss incurred. i.e. it is no need to have a compensation of $1 billion for which the obligations are just less than $1 million. The cost of the insurance is high for $1b compensation anyway!
28
29 30
Shares, stocks, equities and securities are words that are generally used interchangeably.
31
Teacher may explain the concept and feature of iBond to students for their easy understanding.
32
33
After discussion of all types of financial products, teacher concludes the characteristics of financial products.
34
Teacher discusses with students about their investment portfolio and see whether they are willing to take risk or not, then recaps again the relationship between risk and return.
35 36
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Classwork/Home Assignment P.1
Section A: Multiple Choice Questions (@1, total 10 marks) 1. Which of the following is not a financial product?
A. Insurance.
B. Treasury bills.
C. Cash.
D. Mutual funds.
Level of difficulty: *
2. What is the purpose of opening a current account?
A. Saving money.
B. Issuing cheques.
C. Earn interest.
D. Credit card payment.
Level of difficulty: *
3. The maximum protection for deposits in each license bank in Hong Kong under the Deposit Protection Scheme is:
A. $100,000.
B. $500,000.
C. $1,000,000.
D. $3,000,000.
Level of difficulty: *
4. Which of the following types of deposits is not protected by Deposit Protection Scheme?
A. Current account deposit in HSBC.
B. Saving deposit in Bank of China.
C. 1-year fixed deposit in Citibank.
D. 10-year fixed deposit in Standard Chartered Bank.
Level of difficulty: *
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Classwork/Home Assignment P.2
5. The following are reasons for buying insurance except:
A. Receive compensation when accident occurs.
B. Earn extra income when accident occurs.
C. Protection against liability to third parties.
D. Reserve education fund for children.
Level of difficulty: **
6. Which of the following is not the need for life insurance?
A. Dependent’s living expenses.
B. Educational funds.
C. Retirement income.
D. Medical expenses.
Level of difficulty: *
7. Which of the following medical expenses is not covered by a medical insurance.
A. Cancer.
B. Cosmetic surgery.
C. Bird flu.
D. Heart disease.
Level of difficulty: *
8. The value of an investment-linked insurance depends on ___________ of its underlying investment portfolio.
A. risk.
B. types of stocks.
C. performance.
D. rights.
Level of difficulty: **
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Classwork/Home Assignment P.3
9. One of the features of iBond is:
A. fixed interest rate.
B. interest rate is varied depends on Consumer Price Index.
C. issued at discount.
D. high risk.
Level of difficulty: ***
10. Which of the following is the characteristic of mutual funds?
A. Professionally managed.
B. High risk.
C. Generally issued by commercial banks.
D. There is a maturity date.
Level of difficulty: **
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Classwork/Home Assignment P.4
Section B: Short Questions (20 marks)
*** 1. Mr. Chan had three deposits as below:
(i) HK$1,000,000 placed in savings account in Bank of China.
(ii) AUD10,000 placed in savings account in Citibank.
(iii) HK$300,000 placed in the current account in Bank of China (Shenzhen Branch).
Discuss whether these three deposits will be protected by Deposit Protection Scheme?
(9 marks)
** 2. Explain the relationship between risk and return of investment. (5 marks)
* 3. Briefly describe the characteristics of financial products. (6 marks)
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Classwork/Home Assignment P.5
Suggested Solutions
Section A: MCQs
1. C 2. B 3. B 4. D 5. B
6. D 7. B 8. C 9. B 10. A
Section B: Short Questions.
Question 1
(i) HK$1,000,000 placed in savings account in Bank of China.
Yes, it is a deposit in a licensed bank in HK but the protection is limited to a limit of HK$500,000.
(ii) AUD10,000 placed in savings account in Citibank.
Yes, all the sum is protected as the HKD equivalent is below HK$500,000 and is placed in a licensed bank in HK.
(iii) HK$300,000 placed in the current account of Bank of China (Shenzhen Branch).
No, because the sum is not placed in a licensed bank in HK.
(@3, total 9 marks)
Question 2
The following graph provides a perspective on the relationship between the risks and returns of several investment assets.
They are positively correlated. i.e. the higher the risk of an investment, the higher its return and vice versa. For example, an investment in bonds may enjoy a higher return than a bank deposit and there is a higher risk of not getting the money back.
(5 marks)
Resources for the TEKLA curriculum at Junior Secondary Topic 5 Features of Financial Products Strategies and Management – Extension Learning Element
Module E4 Resources Management
Classwork/Home Assignment P.6
Question 3
Three characteristics are common to all financial products. These are yield, risk and liquidity.
• Yield is the amount of cash the owners of a financial product receive or the rate of return on a financial asset.
• Risk is the possibility of loss that may prevent adequate return on a financial product.
• Liquidity is the ability of a financial product to be converted into cash.
Yield and liquidity are inversely related while yield and risk are directly related.
(@2, total 6 marks)
