StockTrak Project

    STOCK-TRAK Simulation

Preliminary Report

STEPS:  1. Complete a four-page description of your investment plans using the topics below as an outline (20 + 5 points)

  1. Summarize your Strategy, filling in the blocks on this page (5 points; 3 + 2 for forecasts)
  2. Staple #2 on #1 and turn in complete report & $2.00/teammate

Due Date:   September 23 (1 point deduction per class period after 9/23)


Team Membersa: ________________________________________________________________


Selection Criteria

Summary of Selection Criteria within Investment Policy (3 points)

[Summary ~ Less than fifteen words]


High Return/Risk v.

Low Risk/Return



Active trading v. Buy-and holding  


Stock v. Bond (v. Options/Futures)  


Economic/political sensitivities  


Special industries v.

Broad diversification



Selection criteria within industry  


Timing & Margin

-Market v. Limit order

Cash v. Margin account



Current income v.

Capital appreciation



Direct v. Indirect Investment
Other considerations


During the simulation, what do you expect to be the rate of return on (1/2 point each):

Common stocks (i.e., S&P 500)?  __________

Treasury bonds (sum of coupon payments & price change)? __________

à Include at least 5 citations from the Internet, Wall Street Journal, Fortune, etc.  (+5) ß

a Groups of two students are acceptable.  Team members share the effort tied to data gathering, decision making and simulation cost that exceeds coordination effort.  Larger groups often result in a “free-rider” phenomenon.




Grade Sheet


STOCK-TRAK Initial Strategy Report



Grading Dimension Possible Points Your Score
Cover Sheet Summary 3
Forecast for common stocks and Treasury bonds 2

Detailed Analysis of:

High Return/Risk v. Low Risk/Return




    Active trading v. Buy-and holding 2
    Stock v. Bond (v. Options/Futures) 2
    Economic/political sensitivities 2
    Special industries v. Broad diversification 2
    Selection criteria within industry 2
    Timing & Margin

-Market v. Limit / Cash v. Margin account



    Current income v. Capital appreciation 2
    Direct v. Indirect Investment 2
    Other Considerations 2
Citation Use – Minimum of 5 5
Total Score 30


Team Members: ___________________________________

Due 10/21


Mid-Semester Report


Fundamental Analysis & Technical Analysis


  1. List the two most important criteria in your selection process and note whether they are fundamental or technical (price & volume related) factors. (4 points)


Primary Factor: ______________________________   Technical or Fundamental? _______________


Second Factor: _______________________________   Technical or Fundamental? _______________



  1. Identify your three largest investments (long or short sales), in dollar terms, to date and justify their selection on the basis of your criteria. (3 points)


Choice Selection Criteria



  1. For these three largest investments calculate the holding period returns for each in dollars and percentage terms. (4.5 points)



Holding Period Return in Dollars


Holding Period Return in % terms
















Using the Wall Street Journal’s “Markets Diary”, Markets Lineup”, “Markets by the Slice,” or “International Stock Market Indexes,” or prime competitor note, whether the three investments beat the return on a relevant benchmark. (4.5 points)





Benchmark’s Holding Period Return in % terms


Did you do better or worse

than Benchmark?














  1. On a separate, typed sheet, list and discuss the major event(s) or condition(s) (company, industry, macroeconomic factors) that resulted in better or worse performance for each of your three largest investments. (6 points)



  1. E. On the line’s below, list at least one mutual fund, option and futures contract that you think would be a good investment and explain your selection. (3 points)




                                   FINAL STOCK-TRAK SIMULATION REPORT

TEAM: _________________________________________________________




Grading Dimension


Possible Score


Your Score


Opening Strategy

– Specify and support strategy

– Relate to original selection






Portfolio Revision

– Specify and support changes






  NOTES to Opening Strategy and Portfolio Revision:

If you did not revise strategy, support decision to maintain original selection

Answer the following questions:

–  Why were certain securities chosen, but not others?

–  Why were certain firms in an industry chosen, but not others?

–  What rate of return were you anticipating?


Performance Evaluation

  a. Largest Stock Investment,

à If largest stock is “b” or “c”, add 2nd largest stock

  b. Investment with greatest gain,

  c. Investment with greatest loss, and

  d. Entire portfolio


   i.  Holding period returns ($, %)

& Evaluation of timing ability

(Buy near simulation period’s low or high?)

ii. Market-excess returns

(Benchmark return over same holding period)

& Comparison to other investments

(Alternative shares, bonds, futures)

iii. Risk-adjusted returns

(Stock – Treynor/Jensen,

Bond/Future/Option/Portfolio: Sharpe)







Proposed future investment strategy

  – Choices for the next six months

– Choices for a 5-year investment horizon

Note 1: Identify specific investments

Note 2: Justify forecasting firm/industry/economy






Report presentation

– Grammar, Spelling, Clarity (subheadings)

– Citations

Bonus Points: Effective use of Illustrations











Length: 4-6 typed pages