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Jewish World Review May 3, 2001 / 9 Iyar, 5761

STEVE INFANTI

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Consumer Reports


Biz schools offer trading room experience

http://www.jewishworldreview.com -- WALL STREET is coming to college campuses in the form of state-of-the-art trading rooms that give business students hands-on experience trading stocks in today's volatile markets.

The trades may be simulated, but students learn firsthand what it is like to lose their shirts or make paper millions in an afternoon.

"You can learn about the different strategies and valuation models in the lectures and the textbooks but, until you are actually in a trading situation where you need to evaluate the data and make a quick decision, you do not really understand trading," says J. Randall Woolridge, professor of finance and the academic director of the Smeal College Trading Room at Penn State University.

Penn State's Smeal College of Business - which opened its "trading room" in April - is one of a handful of colleges around the country investing millions to bring the high-tech financial tools, sights, sounds, and drama of stock trading to their classrooms. The University of Houston, Pace University, Columbia Business School, Wake Forest University, and Bentley College are among the other colleges and universities with trading rooms.

"Today's financial markets have unleashed an increasing demand for individuals who can understand, design, and trade complex securities for investment banks and trading houses," says Woolridge. "Trading rooms put theory into practice. Students conduct stock trades with the same speed and power as if they were in any of the global markets."

Trading rooms replicate a real-world trading environment and function as a classroom as well as a laboratory facility. Students get access to all the data Wall Street analysts have, including live coverage of financial markets from CNBC and CNNfn. Data feeds allow students to make simulated trades using the real-time information. Electronic stock tickers are mounted on the walls.

"Our students are being hired for positions in corporate finance, investment banks and commercial banks. This gives them some of the added skills needed for those positions," says Ajay Patel, associate professor of finance and faculty person-in-charge of the trading room at Wake Forest University's Babcock Graduate School of Management.

Using real-time financial data, students gain exposure to risk management, asset valuation, and other financial concepts. Industry-standard computer software helps students understand basic workings of a trading desk.

The Columbia Business School has its "virtual" Financial Markets Laboratory where students get full access to comprehensive on-line information sources direct from their own personal notebook computers. The virtual laboratory gives students access to real-time financial data and analysis from any network jack in a classroom or public study space.

Building a link between the classroom and the boardroom is an expensive investment - the University of Houston spent $5 million on its trading room - and the value is difficult to estimate.

"The real value is that our students are becoming more aware of the capital markets," says Jahangir Sultan, director of the financial trading room at Bentley College.

Adds Penn State's Woolridge, having one "will help with recruiting and job placement. It certainly elevates our students as they compete for positions."

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