Virtual Stock Exchange Memo

MEMORANDUM

TO: The Club Bartender (Mr. ferTipton knows who you are, but he can’t

remember your name)

FROM: Waylon Smithers,

Mr. ferTipton’s personal secretary

DATE: October 8, 2011

SUBJECT: Your Big Opportunity

Ever since graduation three years ago, you have wanted to manage a hedge fund, those private, unregistered investment pools that employ sophisticated hedging and arbitrage techniques to trade in equity markets, and which cater only to the very, very rich. Because hedge funds are not required to register under the federal securities laws, you would be free to employ all the sophisticated investment techniques you learned as a finance major at UNI. With management fees, and your share of the immense profits you expect to make for your well-heeled clients, you will soon be a member of the very rich yourself…if only you could get started.

That’s why you have been working as a bartender at the very exclusive Gold Coast Country Club since graduation, advancing your investment ideas to any member who will listen. Apparently you have impressed my employer, the eminent John Bears ferTipton, who has directed me to advance a sum of $200,000 for you to manage for him beginning this day. As you are aware, $200,000 is “chump change” for Mr. ferTipton, who can easily direct his multimillions to your hedge fund, making your dream come true. But you will have to prove yourself first.

You will track your investments for Mr. ferTipton using the Virtual Stock Exchange competition. You will invest in at least five to eight stocks, and engage in active management through the end of this semester. On the last day of class, you will submit your report to Mr ferTipton. These are the guidelines:

• A comparison of your portfolio’s performance with the performance of a benchmark; use the S&P 500 index.

• A brief description of your investment philosophy.

• A concise profile of one stock that you...