Abstract

This study introduces the use of an instructor-developed trading simulation to teach intrinsic value estimation, price discovery,and market mechanics. It provides the reader with a cost efficient solution to deepen students’ understanding of financial markets and the price discovery process. By using a multi-week time frame we allow students to analyze the financial information of the companies in the simulation as well as to develop strategies to exploit the market structure and price discovery process. Thus, this simulation combines the importance of financial analysis with the awareness of the impact of liquidity and market organization on price discovery.

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