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

STEPS: 

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

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)

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

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)

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)

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Part 3: Final Stock-Trak Simulation Report

TEAM: _________________________________________________________

Length: 4-6 typed pages