Personal Finance & Investing – A StockTrak Project

This project is by Professor Thomas Krueger, Chair of Accounting and Finance Department at Texas A&M University – Kingsville

STOCK-TRAK Simulation

Part 1: Preliminary Report


  1. Complete a four-page description of your investment plans using the topics below as an outline (20 + 5 points)
  2. Summarize your Strategy, filling in the blocks on this page (5 points; 3 + 2 for forecasts)
  3. Staple #2 on #1 and turn in complete report

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

Team Members ________________________________________________________________

Preliminary Outline:

  • Selection Criteria
    • Summary of Selection Criteria within Investment Policy (3 points)
  • High Return/Risk vs. Low Risk/Return
  • Active trading v. Buy-and holding
  • Stock v. Bond (v. Options/Futures)
  • Economic/political sensitivities
  • Special industries vs. Broad diversification
  • Selection criteria within industry
  • Timing & Margin
    • Market v. Limit order
    • Cash v. Margin account
  • Current income vs. Capital appreciation
  • Direct v. Indirect Investment
  • 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)?
  • Other considerations

Include at least 5 citations from the Internet, Wall Street Journal, Fortune, etc.

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)? __________

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

Part 1 Rubric

Grade Sheet
STOCK-TRAK Initial Strategy Report
Grading DimensionPossible PointsYour Score
Cover Sheet Summary3 
Forecast for common stocks and Treasury bonds2 

Detailed Analysis of:

High Return/Risk v. Low Risk/Return


    Active trading v. Buy-and holding2 
    Stock v. Bond (v. Options/Futures)2 
    Economic/political sensitivities2 
    Special industries v. Broad diversification2 
    Selection criteria within industry2 

    Timing & Margin

-Market v. Limit / Cash v. Margin account


    Current income v. Capital appreciation2 
    Direct v. Indirect Investment2 
    Other Considerations2 
Citation Use – Minimum of 55 
Total Score30 

Due 10/21

Part 2: 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? _______________

2. 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)

ChoiceSelection Criteria

3. 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


4. 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)

Comparative Investment/benchmarkBenchmark’s Holding Period Return in % terms Did you do better or worse than Benchmark?

5. 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)

6. 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)


Part 3: 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, – 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)



Proposed future investment strategy

  – Choices for the next six months

– Choices for a 5-year investment horizon

Note 1: Identify specific investmentsNote 2: Justify forecasting firm/industry/economy



Report presentation

– Grammar, Spelling, Clarity (subheadings)

– Citations

Bonus Points: Effective use of Illustrations




Length: 4-6 typed pages

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