Click here for summary of economics of the market simulation
vote on November 26, 2012
||Percent||Dollars per share|
|Apple Pie|| 11
|Chocolate Chip cookies
|| 11|| 27
|Cinnamon Rolls|| 13
|Ice Cream|| 6
Click here for results of computer trading on November 14
Click here for description of computer trading for November 14
Deadline for trading with paper forms: Wednesday, November 7, 8:25pm
Summary of trading on October 8, 2012
AP volume= 648 average price: 40 maximum: 80 minimum: 15
CC volume= 561 average price: 109 maximum: 175 minimum: 20
CR volume= 950 average price: 47 maximum: 100 minimum: 13
IC volume= 821 average price: 30 maximum: 80 minimum: 20
Results of auction on October 3, 2012
Click here for results of initial auction on October 3, 2012
The class stock market simulation will involve four companies.
- AP: apple pie
- CC: chocolate chip cookies
- CR: cinnamon rolls
- IC: ice cream
The initial auction will be Wednesday, October 3.
At the initial auction you will bid for stocks; the bidders who
bid the highest prices will receive shares of stock
until the supply of each stock is used up.
There are 1,000
shares of each stock; each person starts with
$15,000 worth of cash at the initial auction.
After the initial auction you will be able to trade
your shares of stock with other members of the class,
at whatever price is mutually agreeable. We will have
stock trading in class on Monday October 8.
There will also be another day of in-class trading to be
Class vote/Final Values
Following the end of stock trading, the class will
take a vote between the four treats. The class will
actually receive the treat that receives the most votes.
Therefore, you have an incentive to vote your true
The final value of the shares of stock will be
determined after the vote:
Final payoff for stocks:
- 1st place: pays $100 plus percent of vote per share
- 2nd place: pays $60 plus percent of vote per share
- 3rd place: pays $40 plus percent of vote per share
- 4th place: pays $20 plus percent of vote per share
The final standings are ranked by the highest value portfolio.
- suppose stock A is 1st with 30% of vote; it will be worth $130
- suppose stock B is 3rd with 25% of vote; it will be worth $65
- suppose you have $12,000 cash, 30 shares A, 10 shares B
- total value: 12,000+30*130+10*65=
- total value: 12,000+3,900+650 =16,550
Prizes will be awarded based upon how the value of your
portfolio ranks with the rest of the class:
- 1st prize: win choice of 3 SPU items
- top 5 people win $5
You need to turn in a one to two page paper (worth 10 points)
about your experience in the simulation by the end of the
quarter. Turn this paper in by email.
You can earn stock market extra credit points
- 8 points for finishing in the
top quarter of the class
- 6 points for finishing
in the top half (but not the top quarter)
- 8 points for trading with at least 24 other people
- 7 points for trading with 23 other people
- 6 points for trading with 22 other people
- 5 points for trading with 21 other people
- 4 points for trading with 20 other people
- 3 points for trading with 19 other people
- 2 points for trading with 18 other people
- 1 point for trading with 17 other people
Also, everyone gets the treats you vote on.
Hint: in order to succeed at this simulation,
it helps to be good at predicting which of
the four treats the people in the class will
vote for, since that is what determines the final
value of the shares of stock.
Think about which stocks you would like to
bid on in the initial auction. You can bid on
one stock, or on all four, or two or three; however,
the rule is that the total dollar value of your
bid must be less than or equal to $15,000.
If you bid a higher price, you are more
likely to receive that stock; but the higher
a price you bid, the smaller is the quantity
you can bid for.
Once the in-class trading
starts, it is always to your advantage to buy
a share of stock if you can buy it at a price
that you think will be less than the final
value of that stock. It is to your advantage
to sell a share of stock if you can sell
it at a price you think is higher than
what the final value of that stock will be.
You do not get credit for trading with someone (or with
a group of people) if you make two or more trades that
completely cancel out. For example, if you sell 10 shares of ice cream
at $50 to person A, and then buy 10 shares of ice cream at $50 from
person A, you do not get credit for trading with person A.
This kind of trade is called a wash trade because the results
"wash out" and have no effect.
Be sure that you do not sell stock that you do not have,
and do not spend money that you do not have.
If you do overdraw your account and end
up with a final balance for a stock is negative, then
your portfolio value is charged $300 per share for
each negative share (for example, if a portfolio contains
-3 shares of a stock, $900 is subtracted from the
portfolio value). If the final balance of cash is
negative, then your portfolio is charged $5 for each
negative dollar (for example, if a portfolio contains
-20 dollars of cash, then $100 is subtracted from
the portfolio value).
If you finish with a negative total portfolio value your course
grade will be lowered by at least one grade.
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