You will play a stock game using the free virtual stock market trading site "How the Market Works" to practice trading real stocks using imaginary money to learn how the Market works and to gain experience with virtual trading. After you are done with the game, you will produce a paper on your experience.
"How the Market Works"Directions.pdf to learn how to sign up, navigate the "How the Market Works" website and play the game.
The schema (outline) for the fantasy stock assignment will include five sections. Please use the bolded words as level I headings in your paper:
Please use the five section themes as level I headings in the paper:
Introduction (Use the title of the paper, not the word introduction.)
The Stocks
Diversification
Risk and Return
Financial Results
Introduction: What the purpose of the project is and what you anticipate learning from it. All research and academic papers should have a purpose statement.
The stocks: Explain the stocks you picked for your portfolio and why. Discuss some of the fundamental financials such as sales, revenue, cash-flow, and income, what attracted you to the company? Think about the various financial statements we discussed (or will discuss) in class: a) income statement; b) balance sheet; c) statement of cash flows; and d) reconciliation of net worth.
A short discussion of diversification: Please begin with a formal definition of diversification and include a citation/reference. Why is diversification important? How did you diversify your portfolio? If you didn't diversify your portfolio, that's ok, just tell us why.
Risk and return: Please begin with a formal definition of beta and include a citation/reference Did you choose high or low volatility companies to invest in? I suggest you do some research on Beta (volatility) and how this might or might not have had an influence of your choice of companies in your portfolio.
Financial results: How did your portfolio perform? Did you earn a profit, (we say earn a profit because you took the risk of investing in a particular company) or lose money. Would you pick the same stocks again? Would you purchase these stocks in reality? What did you learn?
The paper should follow APA 6th edition. and should have a cover and reference page.