asset allocation overview everyone starts with same amount of cash, same number of shares in a company each round: you can buy or sell shares end of each round: receive interest on current cash dividend announced; receive dividend payment for each share you own final round: each share may have cash value total payoff = end of game cash interest rate; dividend and redemption value per share: same for all players asset allocation www.moblab.com 9A Playground for Decisions 9
your screen current round/total rounds 9 asset allocation www.moblab.com 9A Playground for Decisions 9
your screen current cash & per-round interest rate 9 asset allocation www.moblab.com 9A Playground for Decisions 9
your screen number of shares you currently own 9 asset allocation www.moblab.com 9A Playground for Decisions 9
your screen possible per-round per-share dividends 9 asset allocation www.moblab.com 9A Playground for Decisions 9
your screen end-of-game dollar value of each share 9 asset allocation www.moblab.com 9A Playground for Decisions 9
the market for shares terminology you buy a share if bid: offer to buy at a specified price ask: offer to sell at a specified price you buy a share if you press “Buy at the Lowest Ask”; OR you have the highest bid and someone agrees to sell at this price you sell a share if you press “Sell at the Highest Bid”; OR you have the lowest ask and someone agrees to buy at this price asset allocation www.moblab.com 9A Playground for Decisions 9
transacting shares move slider to choose a price 9 asset allocation www.moblab.com 9A Playground for Decisions 9
transacting shares press BUY or SELL to place order 9 asset allocation www.moblab.com 9A Playground for Decisions 9
transacting shares current highest BIDS 9 asset allocation www.moblab.com 9A Playground for Decisions 9
transacting shares press to sell at $1.65 9 asset allocation www.moblab.com 9A Playground for Decisions 9
transacting shares current lowest ASKS 9 asset allocation www.moblab.com 9A Playground for Decisions 9
transacting shares press to buy at $24.49 9 asset allocation www.moblab.com 9A Playground for Decisions 9
transacting shares previous transactions in this round 9 asset allocation www.moblab.com 9A Playground for Decisions 9
the market for shares you buy a share if you sell a share if you press “Buy at the Lowest Ask”; OR you have the highest bid and someone agrees to sell at this price you sell a share if you press “Sell at the Highest Bid”; OR you have the lowest ask and someone agrees to buy at this price constraints: can only sell shares you own or buy shares with money you have asset allocation www.moblab.com 9A Playground for Decisions 9
payoffs: an example happy playing! suppose payoffs calculated redemption value=$2; interest rate=10% begin final round: $77.40 and 4 shares final round: sell 1 share@$2.60; dividend=$0.40 payoffs calculated Payoff = cash(1+int rate) + dividend*shares redemption*shares $95.20 ($77.40+$2.60)(1.1) $0.40(4-1) $2.00(4-1) happy playing! asset allocation www.moblab.com 9A Playground for Decisions 9