Point your browser to
and type the ticker symbol of your stock into
the Search Finance box at the top.
Beneath the label “Charts” click “Interactive.”
initial chart shows the stock price (vertical) during the most recent 1d(ay) of trading. If the
chart is unavailable or there is a bad chart find a substitute company for the chart (not the
purchase) > Click 2y(ears) a little to the right of the 1d so that the chart shows the price
movement over the previous two years > Click
> Click the (+) next to Simple
Moving Average (SMA) and a row appears
with a little trashcan, the word “Period”, a box with
the number 50, and the letters S(hort), M(edium), or L(ong) > Change the number in the box
to 10 and click S just to the right > Click the (+) next to Simple Moving Average (SMA) which
adds another row, set the number in the box to 100, and click the L. Then print out this chart
by clicking the print icon way to the right
beside the “Go to Symbol” button
Note that every time
you add a “period” row the color of the new line is automatically assigned by Yahoo. Add several rows to get two colors
that show nicely and delete the period rows that aren’t used. If your company chart is wonky or unavailable, get another!
PRINTOUT 3: Print the chart showing the 10-day and 100-day moving average.
“BUY or SELL”
in big letters at the top of printout 3. Compare the chart to textbook
Figure 8.1 and Rule 8.1 for the moving average trading strategy on page 370-371. Infer
whether your stock is a buy or sell at time of purchase and CIRCLE the correct word.
(2) Mutual Fund
There are over 5,000 mutual funds in the USA so finding a winner
can be difficult especially over a short horizon. A mutual fund screener helps sort funds on
various criteria. Open
, click Research Tools and select Databases,
and in the “Filter Databases by” box, type and select
Morningstar Investment Research
Center. Login with your mybama User ID and password. Next c
lick “Screen for Funds.”
Click the General pull-down menu and see the different sorting criteria that may be used to
screen the funds. You need to SET A MINIMUM OF 4 CRITERIA to get a good-looking final
sample with not more than 20 Search Results. Set any criteria that you wish.
For explanatory purposes, though, here is a little more instruction. Do not use
this exact set-up, change it totally. Here is an example to show how it works:
(1) Scroll down the General list of variables and click Fees & Expenses which is nearly at
the bottom. According to financial experts, mutual fund fees are an important determinant of
wealth accumulation. After clicking the variable, a “Build Screen”” pop
-up box opens. The
Data item “Expense ratio” displays in pull
-down menu 1. Click View data definition to read
about the expense ratio. Since mutual funds don’t send you a “bill” for money due, they
collect their revenue by siphoning off your assets. The bigger the expense ratio, the more
they siphon. Close the definition box. Set the Condition in pull-down menu item 2 that will
screen on the Expense ratio. Probably
“<=” is appropriate here since you want small fees
not large fees. Pull-down menu item 3 is a Value that you must set. Click Benchmark and
view the range of expense ratios across all mutual funds. Close the benchmark description.
Select one of the items for the value, for example, enter a number like 0.8 or select the
Category average. Now that items 1, 2, and 3 in the Build Your Screen pop-up box are
complete, click OK. Notice that the criterion setting displays in the Screener main view. The
number of funds passing the screen displays toward the left of the setting. Perhaps the
number is in the thousands. We need it to be less than 20!
(2) Select Fees & Expenses as the data to screen on. Accept And as item 1, the
“Relationship to other criteria.”
For item 2 set the data equal to No-Load funds (read the
ion for more). Accept the Condition “=” for item 3. For item 4 set the value to
(3) Select Fund Category as the data to screen on. Accept items 1, 2, and 3 as is. For the
Value item in #4 select a category, for example Sector Equity and Financial. Click OK.
(4) Select a fourth criterion to screen on. If zero funds pass your screen then Change one of
When you’ve set 4 or more and find less than 2
0 funds passing your screen, click
the Click button to view results and you are shown a a page that lists the funds passing my
screen and also lists the Screen Summary of criteria settings. Now start over and set
YOUR criteria that imposes your biases and beliefs to find the hidden jewel!
PRINTOUT 4: Print the Results page that lists funds and criteria settings. Note that
some browsers do not show the criteria on the results page but instead only shows
them under the Criteria tab. For that case, print both Results and Criteria pages.
Select one of the resultant funds for your mutual fund investment. Click on the fund name to
get a Snapshot of information about the particular mutual fund.
PRINTOUT 5: Print the pages showing the Snapshot of the mutual fund. WRITE on
the printout the computation for your annual fu
nd “Expenses” by multiplying that
printed number times the amount of your purchase.
For example, if “Expenses” published as 0.67% and the purchase was 400 shares at $27.06,
then on your printout write “400 x $27.06 x 0.67% = $72.52
Jot down the
ticker symbol that appears to the right of the fund name and type it into your spreadsheet.
With the ticker symbol, you can easily find the fund price later.
(3) Corporate bond - Point to
, the home page for the Financial Industry
Regulatory Authority. Click the
” tab and
”. The tools,
calculators, and other information here someday may be worth browsing. For now, however,
along the left frame
(it’s not a tool)
> select the Search tab, and then Show
“Advanced Search” > click “Corporate” for the bond type.
Set (a) coupon type = fixed; (b)
Interest Frequency = Semi-annual; (c) maturity date two years or more beyond the end of this
semester, (d) set trade parameters indicating trading activity within the last 10 days; (e)
Exclude Callable. Show results. Set if you wish any of these optional variables: an issuer
name (e.g, Alabama), coupon rate (e.g. 5.0 to 8.0), rating (e.g. AAA to BBB), or industry
group (e.g. Utility). Refine as needed. See the bond detail and select a bond by clicking the
link in the Symbol column.
PRINTOUT 6: Get the Bond detail for your bond. WRITE on the printout the
computation showing the lifetime interest income expected from the bond.
For example, if the Bond detail publishes the coupon rate as 3.625% then the interest per
$1,000 bond equals $36.25, which is $18.125 per half-yea. If you count from now until
maturity, figuring that 7 coupons remain, then on your printout writ
e “7 x 3.625% x $1000/2 =
$126.87 total interest income.”
Notice that Finra and Bloomberg quote bond prices per $100; e.g., 98.63 means a bond
price of $986.30 and to spend $10,000 you must buy 11 bonds, 102.87 means $1,028.70. In
your spreadsheet enter, for example, 986.30 or 1028.70.
(4) Treasury security - TIPS are U.S Treasury inflation protected securities that hedge
on USD purchasing power. That is, the investment rate of return indexes to inflation in a
positive way. Find a recent secondary market TIPS price at
Two prices exist in any
commodity market. The top row of the table at tim
e of this writing shows the “Bid” is 10
and “Asked” is 10
3.07. Buy at the Asked price to invest, sell at the Bid price to divest. Thus,
the preceding quote shows sellers received $1,030.60 for the bonds (recall their face value
equals $1,000). Buy one at $1,030.70 except the minimum purchase requirement is $10,000
so buy 10. Choose one of the TIPS
and buy some and don’t get one that matures too soon.
Record in your description cell the coupon rate and maturity date, then the price cell gets
dollars per $1000, for example $1030.70. Later, for TG#2 & #3; add $25 to your original
bond price (e.g. $1,055.70). Use this pretend policy since the quote for a TIPS price
publishes infrequently. No print-outs or subsequent visits to this site are required.
(5) Options - There are many different strategies since there are many kinds of options
in many different markets. Here is one plan to buy a stock option for a well-known company
in the news about which maybe you have a hunch whether market sentiment is bullish (rising
price) or bearish (falling price). Browse to
and type in the stock ticker
symbol for your target company in the Quote Lookup box and click Go (the Search for ticker
is pretty simple if needed). When the stock page pulls up then along the left-frame click
Options. Next, select a tab with date beyond end of the semester. The column labeled Last
is the option price at the last trade. Each row is a different option. The put profits when the
stock price falls so bears buy them. The bulls buy calls which profit when the stock price
rises. Choose an option near the biggest Open Interest number
(“near the money”). There
the capital is flowing deepest and for TG#2 you
ly find the price again. Enter the LAST
price per option into the spreadsheet plus a good description of the entire SYMBOL
(copy/paste the ticker into
the description cell, e.g. “ENR140222C006000”
; no print-outs
needed). For optional information on options see textbook chapter 12 and
(6) Foreign currency exchange traded fund - Point your browser to
and scroll down the page to the “Top 10 Currency
” Each row represents an exchange traded fund that profits (loses)
exchange rates move. Hold the cursor over the Symbol to view the name of the fund and
click the symbol to access more information. For example, click CYB and scroll down to the
Fund Summary and read how this fund profits when the Chinese yuan appreciates relative to
the US dollar. The price per share of the fund is in column “Price.” Select one of these or
any other currency fund, invest at least $10,000 and record the price in your spreadsheet (no
print-outs needed). Another great site for free ETF research is
Part 2: Spreadsheet and first submission
Get the spreadsheet from the assignment resources page at
Save your copy of trader.xlsx to your storage media. To make sure it works, exit the internet
browser and open the file. There should not be any errors, warnings, or suspicious Excel
conversion functions. Post a query on the Discussion Board or see the Bashinsky specialists
if you have difficulty obtaining a usable spreadsheet.
Put your name in cell E1 and your section code in B1: 320, 901, 902, Arnatt, Jeff, MsZ
a. Enter the prices of the 6 start-up investments in ranges E6:J6. Enter the quantities in
E3:J3. The price times quantity should exceed $10,000 at startup. Buy them before the first
due date. Enter really good descriptions of the securities in E2:J2 so that you can easily find
the prices later for the second and third due dates. For all current purchases the sum of
prices times quantities for these 6 is in E27. Type Total spending from E29 into O7.
b. Collect the SP500, too (ticker symbol = ^SPX), and enter in D6. The SP500 usually
appears near the Dow-Jones Industrial Average (DJIA) on many web-pages. The SP500
represents one of the more comprehensive measures for the stock market performance of
US large capitalization companies (the DJIA is made from 30 stock prices). For background,
c. If you buy an extra security then enter its description in D16. Enter its price in D17 and
again in D18. Enter the quantity in D19. Repeat the data entry in range E16:E19 for your
second extra security, etc.
d. Cell O14 shows the value of your securities given that all quantities and prices are
entered correctly. Confirm that cell O16 plus cell O8 equals $100,000. If false, find a fix.
When true, then in cell O14 type the number from O14 that replaces the O14 formula. This
prevents O14 from changing later when you change quantities to zero.
e. The "Reconciliation of Balances with Expenses and Income" in K2:O20 is like
balancing a checkbook. For "total purchases," sum the value of all securities purchased.
Cell E27 shows the cost of the startup investments. Cell E28 properly measures the cost of
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up to two optional extra investments. E29 shows total purchases. If you sell securities
(unlikely for first due date unless you are a raging bull) or receive stock dividends
(unnecessary to report) or bond coupons (unlikely for first due date) then enter in L7 and L8.
f. The total account value equals the market value of securities plus cash and is cell O16.
Put your name in cell E1 and your section code in B1: 320, 901, 902, Arnatt, Jeff, MsZ
Put your name in cell E1. A few days before the due date get these two printouts:
COVERPAGE1a: Print the range C1:J30
To print this, highlight it by moving your cursor while holding down the right mouse button,
etc. (many different ways). Click File, Print, Selection! Scale, move margins, : MAKE IT
PRINT ON ONE PAGE!
COVERPAGE1b: Print the range K2:O20
The preceding range is your brokerage account statement of cash flows. Make sure the
money coming in and going out is counted correctly. That is true when O16 + O8 = 100K!
Staple papers into one bundle and submit with coverpage 1a on top, followed by 1b,
printouts 1-to-6, and the bonus eligible optional BBL or BMC printouts (keep copies).
Part 3: The second submission
A few days before the second due date in Table 1 choose any 2 things you own and sell
them. Plus buy 2 new things. Make the choices --
sell your winners or hold ‘em?
losers or were they underpriced before and now they are even better? Record the prices and
brokerage account deposits and withdrawals in the spreadsheet using the instructions below.
Also get these required internet printouts for the second submission.
It’s time to take the FINRA Investor Knowledge quiz. The “Financial Industry Regulatory
Authority” (FINRA) is a new mi
llennium consortium of industry and government agencies that
facilitate access for companies and households to financial markets and products. The
consortium has a long history under different initials and is globally powerful. Point your
and take this quiz. At the
end click SUBMIT. Print the quiz & results.
PRINTOUT 1: Print the complete FINRA quiz with your answers and score.
WRITE on the printout which question was most surprising and why.
Get the next required printout at
. Click on the “Personal Finance”
tab, then toward the
bottom of the page “Calculators.” These different calculators and
planners at this and many other sites help you with different aspects of modern financial life.
Choose the one that interests you most and fill out its fields and obtain its analysis.
PRINTOUT 2: Print the web-page with the results from an interesting calculator.
WRITE on the printout how much time in Excel you estimate it would take you to
model the calculator scenario and whether you ever could imagine doing so.
Update the spreadsheet for the second submission as follows.
a. Before but near the second due date find current prices for everything you own plus
the SP500. Data entry to D7:J7. If you made extra buys for the first submission collect and
data enter to D18:E18 etc.... For the 2 sells sum the products of prices times quantities, type
the sum you are depositing into L27, and set the quantities (e.g., cell E3 if you sell the stock)
at zero. Congratulations! You’ve completed your first investment roundtrip. If you deposited
more from selling than you withdrew for purchasing these securities then the account balance
increased (less built-in 1% transaction fees each way that automatically debited).
b. For the 2 or more securities you are purchasing type the descriptions in D16.E16.&c
(don’t overwrite old data).
Enter the price in D17 and again in D18 (if you made extra buys
use E, F, etc). Enter the quantity in D19. Repeat the data entry in range E16:E19 for your
second purchase and any extra securities, too. For all current purchases sum the products of
prices times quantities, and type the sum that you are withdrawing into O27.
c. Cell O34 shows the value of your securities given that all quantities and prices for
securities are entered correctly. Once all steps are complete then in cell O34 type the
number to replace the formula.
d. The total value of your account equals the market value of securities plus cash and is
in cell O36. Make sure it is correct and consistent with the entirety.
Be sure your name is in cell E1 and section in B1. A day or two before the due date get
these two printouts from the spreadsheet.
COVERPAGE2a: Print the range C1:J30
File, Print, Selection, SCALE, MOVE MARGINS! MAKE IT PRINT ON ONE PAGE!
COVERPAGE2b: Print the range K22:O40
Staple papers into one bundle and submit with coverpage 2a on top, followed by 2b,
printouts 1-to-2, and the bonus eligible optional BBL and/or BAT printouts (keep copies).
Part 4: The third submission
TG#3 has 3 items. One is the spreadsheet printouts after liquidation to cash. Second are the Bruno Business
Library printouts (BBL) from the Bloomberg Terminal or Morningstar Investment Research Center (IRC). Third
are 3 short essay answers. The spreadsheet and BBL printouts are required, no exceptions or exemptions.
You can be exempt from some or all the essays by doing other tasks (see 4a,b,c). Earn a bonus by submitting
those tasks early: Submitting with TG#1 gets more than with TG#2 than with TG#3.
4a. Campus students may complete two Bloomberg Market Concepts modules (the BMC, choose the
Equity module and the Fixed income module) as substitutes for essays #2 and #3. For TG#3 submit only the
BMC confirmation, the spreadsheet printouts, the BBL printouts, and essay #1.
4b. Campus students may complete four Bloomberg Market Concepts modules as substitutes for essays
#1, #2 and #3. For TG#3 submit only the BMC confirmation, the spreadsheet printouts, and the BBL printouts.
4c. Distance students (Fi302-901) do not have access to the BMC which is offered for free only at
terminals in the Bruno Business Library. These students may exempt essays and earn bonuses by doing
advanced tasks with the library online subscription to the Morningstar Investment Research Center (IRC). For
Get a bonus, submit the BBL or BMC/IRC items with TG#1 (4 points per item, max bonus = 8 points) or
TG#2 (3 points per item, max bonus = 6 points) instead of with TG#3 (no bonus, no penalty).
For more information on the BBL printouts see
4.1 Update the financial statements after liquidation to cash.
Before but near the third due date in Table 1 find current prices for everything you own plus
the SP500. Update the spreadsheet as follows.
a. Data enter to D8:J8 and D18:E18.
Securities sold for TG#2 don’t require price updates.
b. For all extra investments made since the second due date (none are required) sum the
products of prices times quantities and type the sum that you are withdrawing into O47.
c. You are required to credit your account with the interest from your corporate bond
coupon, not required for the TIPS, however. Your share of a semiannual coupon equals the
proportion of a half-year (182.5 days) for which you owned the bond; e.g., if you owned a 9%
bond for 21 days, your coupon income equals ($90/2)x(21/182.5), or $5.18 per $1000 bond
20 bonds, that’s a hundred bucks!).
Enter that coupon income cell L48. Whether you
want to add any dividends declared by your stocks is optional. Search company news on the
internet if you wish to find financial information about dividends.
d. Type into L47 everything you get from selling the securities. Set the quantities (cells
E3:J3 and D19, E19 etc) at zero. If you deposited more from selling than you withdrew for
purchasing securities and covered automatic 1% transaction fees, then the account balance
increased. Cell L59 is bigger or smaller than $100,000 for positive or negative rate-of-return.
Make sure your name is in cell E1. Get these two spreadsheet printouts:
COVERPAGE 3a: Print the range C1:J30
File, Print, Selection, SCALE, MOVE MARGINS! MAKE IT PRINT ON ONE PAGE!
COVERPAGE 3b: Print the range K2:O75
Staple papers into one bundle and submit with coverpage 3a on top, followed by 3b, then
your essays, and then the required BBL printouts (if not already submitted or exempted). Get
a bonus by submitting the BBL or BMC/IRC items with TG#1 (4 points per item, max bonus =
8 points) or TG#2 (3 points per item, max bonus = 6 points) instead of with TG#3 (no bonus).
Learn more about the BBL and the BMC/IRC in
4.2 Short essays for specific open-end questions
Present discussions in paragraph form with itemized headings for each of the 3 questions
below. Consider each one as a two-to-four paragraph essay. Your report should be a non-
sensitive, impersonal business report befitting a literate graduate from a top-50 business
school. Mechanical errors, such as spelling mistakes or disagreement between subject and
verb tenses detract from quality. A high-impact report incorporates headers, itemization,
short paragraphs, and smart sentences. Edit several times before submission.
Essay #1. Market backdrop and portfolio performance (15 points maximum)
Summarize and reference one financial author who explains why market prices moved as
they did during the recent past. Use your words and paraphrase his/her/their argument for
“why and what happened to the financial market just then?”
Debate the point. Link your
portfolio gains, losses, and trading activity to the preceding argument.
Essay #2. Use beta for your stock to find the economic profit (10 points maximum)
How much economic profit (%) did the start-up common stock create for a well-diversified
portfolio? Compute ROR
throughout your common stock holding period. HINT:
The textbook paragraph on p. 546 following formula 11.6 explains how ROR
-8.11% for company A. Into that textbook example substitute these numbers: Compute
using (i) alpha and (ii) beta from the BBL or the Company summary page on
google or yahoo (if alpha is unavailable set
= 0) and (iii) get ROR
as the %
your spreadsheet. Show the derivation for ROR
and explain what it means!
Essay #3. Choose one from below (15 points maximum)
3a. Explain the rationale for the transaction that you executed for the second submission.
Document the extent by which the securities you sold at the midpoint perform relative to the
replacements. Figure how the ending portfolio balance was affected.
Or 3b. Explain how the price of your start-up corporate bond promised ROR relates to
interest rate movements. Compute
next year’s interest rate at which the one year rate of
return from owning your start-up bond would be zero. At that end-of-year rate the capital loss
(PV on calculator) from the price change exactly offsets the income (PMT) from the coupon.
even rate” is shown on the library Bloomberg Horizon Analysis graph.
Quantitatively compare the current yield with capital gains yield for that scenario. See the
textbook discussion in Ch. 6.3.B on
for background reading.
Or 3c. Explain the effect of the foreign currency ETF on your portfolio. Discuss whether
the currency appreciated or depreciated relative to the USD and other major currencies. Was
there any currency for which the exchange rate moved so much during the game that your
ending wealth would have been greater had you invested $100,000 beginning wealth to buy
and hold that one ETF instead of the portfolio?
Trading Game XRules for exceptional circumstances
This information explains exceptional circumstances that may not occur for all students.
XRule - 1) NOTICE ON MISSING OPTIONS PRICES. Sometimes you buy an option and its price
will cease to be listed because the option ceases to be traded. If this problem persists for more than a
week, you may make either of the following adjustments: (1) maybe your option is not trading
because it is worthless. For example, if you have a call option for buying NCP shares at $20 per
share, but the share price falls to $10, your option won't be traded because it is worthless (who would
want to use it?) On the spreadsheet, enter a price of $0.01 for your option (with $0.00 some of the
formulas won’t work). (2)
When your option becomes too valuable, it ceases to be traded.
Approximate its value by comparing its last price with some options on the same stock but with
different strikes and extrapolate. For example, if you have a call option for buying AMR shares at $10
per share, and the share price goes to $35, your option may cease trading. You may have noticed
that, during the days its price was listed, your option's price was $22 more than the ones with a strike
of $30. If the ones with a strike of $30 now have prices of $9, then you can approximate the price of
your option as $31.
Remember, it’s only pretend money so do what seems reasonable.
XRule - 2) NOTICE ON STOCK SPLITS: There is a tiny chance that during the period you own the
stock the issuer announces a stock split. For example, if your stock had a 2-for-1 split then your
number of shares doubles and the price that you see all of a sudden is about half-as-large as before.
You must find company information and verify the split ratio. It might be 2-for-1, 3-for-2, etc. You must
be certain of the ratio. Then adjust either your quantity or the quoted price, but not both, with the split
ratio. For example, if the post-split price is $50 but you know it was a 2-for-1 split then in the
spreadsheet either double the number of shares or the post-split price.
XRule - 3) NOTICE ON MISSING BOND PRICES. Sometimes you buy a bond and its price is not
listed next time probably because the bond was not traded. The website shows no price instead of an
old price. Bonds do not trade as frequently as stocks (IBM has only one stock
it trades frequently
whereas IBM has dozens of bonds
not all trade everyday). Use the most recently available price for
your bond even if old. If this occurs for your bond perhaps look on the internet every few days to see
if a newer price appears; then
if it doesn’t appear next time at least you’ll have a more recent price. In
the worst case just use the same price as before. I
t’s only pret
end money so do what seems
XRule - 4) Each individual student must submit an individual performance. Although two different
students may both own, say, shares of IBM or bonds of WMT, there is no way that all securities can
be the same, nor should discussions about the securities look alike. Copying or paraphrasing each
other’s work, or several persons submitting identical Bloomberg printouts with time
-stamps within 15
minutes of each other, is a violation of the UA Code Of Conduct. Definitely the wrong thing to do!
Such ethics violations may incur severe penalties, including penalties and sanctions that note the
incident in your permanent CBA student file.
Documents you may be interested
Documents you may be interested