This experiment can be used to identify the difference between saturated and unsaturated fats. If a fat (or oil) is unsaturated, it has double bonds and iodine can react with the oil and become a substituent group on the fat. If this happens, the distinctive color of the iodine will go away. You will likely have to shake the test tube to get them to mix some to see if the reaction will occur. A saturated fat will not have any reaction and the iodine will just separate from the oil.