Virtual Stock Exchange Handout

Virtual Stock Exchange

Portfolio Management Project

Purpose

The purpose of using Virtual Stock Exchange is to give you a better understanding of trading strategies and portfolio management. You will also learn a variety of financial instruments and their risks and rewards as they apply to asset management.

Project Overview and Goals

Acting as a prospective portfolio manager for Holy Cross International clients, your potential clients have entrusted you with $100,000 to invest at your discretion until June 15th, 2012.

They are expecting you to invest their money wisely and profitably. While your clients desire a high rate of return, their tolerance for risk is considered low.

Additionally, your prospective clients are considering other asset managers (your classmates) and will be ranking each according to the success of their portfolio management. You will be able to track how you are measuring up throughout this exercise.

At the end of the trading period, if your clients are satisfied with your performance managing their portfolio, they will extend their relationship with you.

Specifically, they are concerned about the following criteria:

* Returns

* Absolute return:  The total dollar increase in the portfolio over the trading period

* Risk-adjusted return: The return on the portfolio taking into account the level of risk assumed by you, as measured by Holy Cross International’s Chief Investment Officer Mr. Clarke.

* You are instructed to have your money spread across different industries to reduce risk, search for firms that are consistently profitable, and keep a reasonable amount of cash on the sidelines.

Registration

To register your account, go to http://www.marketwatch.com/game/

(The game is titled HCSS-Economics and the password is hcss-economics)

Schedule

Date | Event |

Weeks 1 | Join GameDiscussion with your CFO |

Weeks 2-3 | Develop and submit Portfolio Statement (2 Pages Typed) |

Weeks 4-6 |...