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Student Experiences

A Professor's Drive to Teach Finance

While others are making their morning commute down i-15 catching up on news or traffic, Ray Nelson is strolling down University Avenue brainstorming innovative ways students can learn.

For the past ten years, Nelson, a Marriott School finance professor, has been walking or biking to campus and using that time to refine his ideas for an interactive web site that eliminates the need to lecture from a textbook.

His web site allows students to interactively learn how the finance markets work. A student, for example, could determine how differences in the bonds market are affected by variables such as price, quantity, and maturity. Instead of old models where students would have to decipher verbal cues from a book, students are now able to see the market shift right before their eyes.

"Previously students had to manually draw out each graph before setting up a problem. It was time consuming," Nelson says. "This model engages more of the senses and allows students to have more repetition and cognition."

Instead of using old-school rulers and graph paper, his students are working with numbers and analysis. Students then apply this knowledge to current markets by browsing links to hot topics in economics such as articles on the Fed's philosophy in The Wall Street Journal or musings on the Dow in The Economist. The net result, Nelson says, is that students master the concepts faster and easier and can apply this knowledge to real-life situations.

"We used the interactive web site to gain better insight into the current credit crunch epidemic," says Danielle Pharo, a senior finance major from Alamo, California. "Using just the money multiplier—a banking and Fed balance sheet—we applied our classroom learning to the economic crisis."

Pharo's class used the money multiplier and injected funds into the market. They observed how stagnant the graph stays when loans are not made and how, over time, the balance sheets would retract. This firsthand look at the markets helped Pharo personally visualize the detriment of simply dumping money into the economy.

The web page not only helps users observe problems with the economy, but it also illustrates ways to boost it. For this reason, it is aptly named "market workplace" and functions like a workbook: it sets out graphs and functions but leaves necessary fields blank. Almost any variable that affects the economy is found in the market workplace. These are features that not even the most elaborate textbooks can boast.

"Professor Nelson comes to class completely prepared, and he never lectures from a book or notes," says Katy Pratt, a senior finance major from Salt Lake City. "He logs onto the web site, plugs in formulas, and shows us how macroeconomic principles come to life."

Pratt, Nelson's teaching assistant, says she has observed a definite increase in productivity and understanding in classes. Before the current version was unveiled last fall, students were easily confused with difficult concepts. Now they have twenty-four-hour access to the materials and often teach themselves. Perhaps the biggest boon to students is that these tools don't expire when the class is finished.

"One of the things I hope to accomplish is that students continue to use the site well after they've graduated," says Nelson, who has been carefully refining the market workplace for the past ten years. "Former students will call to tell me that the concepts they thought they wouldn't need to know are very relevant in their lives."

And even with how comprehensive market workplace is, Nelson says he is still not done improving it. The next time you're on University Avenue and witness a man strolling down the street deep in thought, you might be seeing the spark of inspiration ignite.

"My main goal is to allow students and others the opportunity to gain and retain knowledge throughout their lives," he says. "The personal satisfaction of seeing students using the software is enough for me."

Nelson's web site may be accessed at marriottschool.byu.edu/teacher/moneybank.

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Photography by Mark Phillbrick/BYU