Stock Trak Assignment: Principles of Financial Management

Purpose: To give students a better understanding of the U.S. stock market by participating in a stock market simulation exercise. Each student will start with a portfolio of $1,000,000 in cash and have the opportunity to invest this money in stocks, bonds, and mutual funds of companies traded on U.S. exchanges.

Guidelines: Must logon to Stocktrak (a link will be emailed to you) and complete your first trade no later than October 1st. Must complete at least four trades by the end of the simulation. No single position can be greater than 25% of the portfolio balance. The simulation will start on September 18, 2017and run until November 17, 2017. Each student will be given access to an account with $1,000,000 to manage.

At the end of the simulation period you must write a report on your performance during the simulation and a reflection section that describes how the experience affected your understanding of the stock market and your investing style. The report must cover what you did including all of the following:

1.) The ending account balance as of November 17, 2017.
2.) The rate of return for this account during this time period.
3.) How many trades were completed on the account?
4.) Describe your method for stock selection.
5.) Did you sell any shares? If so, how did you decide what stocks to sell?
6.) Compare your return with that of the Standard & Poor's 500 (SPY) index and discuss why your performance was better or worse than the benchmark.

In addition your report should have a reflection section in which you discuss two of the following:

1.) How would you improve your results if you were to participate in another simulation?
2.) How has the simulation changed your knowledge of the stock market?
3.) Evaluate the risk you took in this portfolio. Do you feel it was higher or lower than the Standard &Poor's 500 index? Why?
4.) What did you learn about yourself by taking part of this simulation?
5.) Only for those who completed 25 trades or more during the simulation: How do you think the frequent trading impacted your portfolio results? Did you ever regret a trade you made? If you did, please explain.