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Volume 78
Volume 79

UTM cashes in at TVA Investment Challenge

Published (Volume 78, No. 20)

UTM finance students won first place in the 2005 Tennessee Valley Authority Investment Challenge, beating out 25 other universities in a competition where students managed a real stock portfolio that was valued at $690,000 by the end of 2005, marking a 20.22 percent return this year.

UTM students in a finance class co-taught by Mahmoud Haddad and Arnold Redman, both finance professors, are put in charge of managing hundreds of thousands of dollars and are responsible for every aspect of the process. Students decide when to buy, sell or maintain stock.

Students monitored their portfolio on a daily basis and made stock trades into and out of their holdings to increase the portfolio’s worth.
Haddad said students monitored data from a variety of sectors of the U.S. economy as an indicator of when to buy, sell or hold stocks.

“It helps the students because it is a hands-on experience and they are managing real money. The students make all of the decisions on what to buy and sell and maintain the rules regulation that the TVA managers have given them,” said Haddad.

Before enrolling in the investment challenge class, students must have taken investment 311. This allows them to learn the theory of investment and then put it into practice with real money, said Haddad.

“This is one of the most successful courses in the finance curriculum. It allows hands on experience that will help in the real world. It allows students to practice what managers at investment companies like Merrill Lynch would do every day,” said Haddad.

Haddad added that this process is great for helping students find jobs in the field.

Coming in second place in the program was the University of Alabama at Huntsville with an annual return of 16.55 percent. Third place went to the University of Kentucky with a return of 16.49 percent.

The investment challenge program as a whole returned 6.5 percent versus 4.9 percent for the S&P 500, making 2005 the sixth out of seven years that the program has beaten the S&P 500 index.