MSFT (MICROSOFT) PRICE LEVEL MARKET Iowa Electronic Markets

Contracts 4 Winner-Takes-All Contracts 4 Based on the price level of Microsoft Common Stock (MSFT) 4 Liquidation values determined by MSFT price levels –Closing price on 3rd Friday used to determine liquidation –“H” contract pays $1 if P MSFT > Cutoff –“L” contract pays $1 if P MSFT <=Cutoff

Contract Designations 4 Four components: –Partial ticker symbol denoting Microsoft –Cutoff price –Letter denoting month –“H” denoting higher or “L” denoting lower UnderlyingLiquidation ContractFundamental Value MSxxxmH Microsoft$1 if MSFT closing Price > $xxx MSxxxmL Microsoft$1 if MSFT closing Price <= $xxx

Month Codes MonthCodeMonthCodeMonthCode JanuaryaMayeSeptemberi FebruarybJunefOctoberj MarchcJulygNovemberk AprildAugusthDecemberl

Unit Portfolios 4 1 Share of each contract 4 May be purchased from or sold to the exchange at any time for $1 using 1$m 4 May be purchased form or sold to other traders at any time using MKTm

Contract Liquidation 4 Monday after 3rd Friday of month 4 Official prices –The Midwest Edition of the Wall Street Journal 4 Effects of events –Delisting: Use last trade price –Stock Split/Stock Dividend Multiply last price to reflect pre-split/dividend value

Other Information 4 Listing new contracts –Monday after 3rd Friday of each month 4 Access –Academic traders