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)
- Summarize your Strategy, filling in the blocks on this page (5 points; 3 + 2 for forecasts)
- 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: ________________________________________________________________
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Selection Criteria |
Summary of Selection Criteria within Investment Policy (3 points)
[Summary ~ Less than fifteen words] |
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High Return/Risk v. Low Risk/Return |
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| Active trading v. Buy-and holding |
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| Stock v. Bond (v. Options/Futures) |
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| Economic/political sensitivities |
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| Special industries v.
Broad diversification |
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| Selection criteria within industry |
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| Timing & Margin
-Market v. Limit order Cash v. Margin account |
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| Current income v.
Capital appreciation |
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| 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
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| Grading Dimension | Possible Points | Your Score |
| Cover Sheet Summary | 3 | |
| Forecast for common stocks and Treasury bonds | 2 | |
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Detailed Analysis of: High Return/Risk v. Low Risk/Return |
2 |
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| 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 |
2 |
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| 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
- 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? _______________
- 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 |
| a. | |
| b. | |
| c. |
- For these three largest investments calculate the holding period returns for each in dollars and percentage terms. (4.5 points)
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Investment |
Holding Period Return in Dollars |
Holding Period Return in % terms |
| a.
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| b.
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| c.
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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)
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Comparative Investment/benchmark |
Benchmark’s Holding Period Return in % terms |
Did you do better or worse than Benchmark? |
| a.
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| b.
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| c.
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- 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)
- 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: _________________________________________________________
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Grading Dimension |
Possible Score |
Your Score |
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Opening Strategy – Specify and support strategy – Relate to original selection |
2 |
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Portfolio Revision – Specify and support changes
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2 |
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| 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? |
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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 Include: 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) |
12 |
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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 |
2 |
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Report presentation – Grammar, Spelling, Clarity (subheadings) – Citations Bonus Points: Effective use of Illustrations |
2 |
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20 |
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Length: 4-6 typed pages