Download Student Handbook - Unit Trust Corporation

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Contents
Welcome
3
About The Game
4
Rules
5
Investment Instrument
Information
7
Calculation of
Broker’s Fees
9
Specimen Sheets
Initial Portfolio Statement
10
Portfolio Change Request
11
Acquisition of Assets
Portfolio Change Request
12
Disposal of Assets
1
II
2
Welcome
November 17th, 2006
Dear Students
Thank you for your interest in participating in this our 15th edition of the Schools’ Investment Game.
The Schools’ Investment Game represents our ongoing commitment to investor education regarding
financial literacy. The game was created to enhance the knowledge learned in the classroom and
provide them with the practical exposure to the money and capital market.
When the game commenced in 1992, we could have never envisioned the tremendous impact it would
have had in the development of so many young persons. To date, in excess of Seven Thousand (7,000)
students have participated in the game representing over 40 schools. Some of these students have
progressed into careers in the financial industry and we are proud to have been a part in the nurturing
of these young minds into highly capable young men and women.
Let me take this opportunity, to commend the efforts of your principals and teachers as they give of their
time and energy to ensure that you complete the game’s exercises and provide guidance in areas where
you may experience difficulties. Please note that the members of staff of the Unit Trust Corporation will be
made available to offer any assistance to the respective teams if necessary.
To you the participating students, we hope that your experience be a rewarding and enjoyable one. ENJOY!
Gayle Daniel-Worrell
Vice President
Marketing and International Business
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About the Game
As is customary with all games, a sound knowledge of the rules is necessary though not a sufficient
condition for winning. We therefore provide you with a set of guidelines, which you will find useful in
helping to shape your investment strategy.
Included in this booklet are specimen sheets of the initial portfolio statement and of the acquisition
and disposal of assets. Please examine each one carefully as this will assist you in minimizing the
amount of errors made throughout the duration of the game. You will also find information on all the
instruments to be used as well as a guide to the calculation of brokers’ fees.
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Rules
•
The game will be conducted from November 27th, 2006 to April 27th, 2007
•
A school will be able to submit as many teams as desired
•
Each team will consist of a maximum of 5 students and a minimum of 3 students
•
Teams will/can invest in the following instruments:
-
Unit Scheme - Growth & Income Fund
-
Second Unit Scheme - Money Market Fund
-
Fixed Deposit
-
Savings Account
-
Company Shares traded on The T&T Stock Market
-
Chaconia Income & Growth Fund
-
Us Dollar Money Market Fund
Each team will be allotted a notional sum of twenty thousand dollars ($20,000.00) for investment.
Teams must invest in all of the seven (7) instruments in any proportion but no more than
eighty per cent (80%) of investable funds may be in one instrument. may be in one instrument.
In addition not less than TT five hundred dollars (TT $500) may be invested in any one
instrument.
Competitors will indicate their initial investment choices, as shown, on the attached specimen initial
portfolio statement.
Changes to investment will be made on the Disposal of Assets and the Acquisition of Assets sheets
accordingly
At the completion of the game, the team with the highest return will be adjudged the winner.
Interest rates on Savings & Fixed Deposits will be determined by the Unit Trust Corporation and will be
based on the best current market rates for the dollar amount invested.
Dividends earned from investments in Company stocks and the Unit Trust’s First Unit Scheme will be
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determined from historical data for the period and will be applied at the end of the period.
Since income is credited quarterly in the Unit Trust’s Second Scheme and the US Dollar Money Market Fund,
the accrued income will be calculated at the end of the quarter
Prices for the Chaconia Income and Growth Fund (US Dollar Denominated Fund) are quoted along with the unit
prices in the daily newspapers.
The following prizes will be awarded to first, second, third and fourth place winners only:
First Prize: $1,000.00 in Supplies and Equipment and a Challenge Trophy
Second Prize: $6,000.00 in Supplies and Equipment and a Trophy
Third Prize: $4,000.00 in Supplies and Equipment and a Trophy
Fourth Prize: $2,000.00 in Supplies and Equipment and a Trophy
Accounts will be opened in the First Unit Scheme - Growth and Income Fund.
For all winning teams (First to Fourth place), the sum of Two Hundred dollars ($200) woth of units will
be awarded.
There will also be prizes for the monthly winners along with prizes for the teachers of the winning teams.
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Investment Information Sheet
A. FIRST UNIT SCHEME:
Prices fluctuate on a daily basis. Units are purchased at the offer price and redeemed at the bid price.
Daily prices of the First Unit Scheme are published in the daily newspapers and the Unit Trust Corporation
Website: www.ttutc.com
B. SECOND UNIT SCHEME:
The price is $20.00 per unit
The Interest Rate for September 2006 - 5.75%
The Interest Rate for October 2006 - 5.75%
The Interest Rate For November 2006 - 5.75%
C. FIXED DEPOSIT:
Deposits may be placed for varying maturity periods:
3 months at a rate of 3.00% per annum
A break-rate will be applied if the fixed deposit is broken before the selected maturity period and will be
equivalent to the regular savings rate of 1.5%
D. SAVINGS DEPOSIT:
Rate: 1.5%
E. TRINIDAD & TOBAGO STOCK MARKET:
The daily newspapers (Trinidad Guardian, Newsday and Trinidad Express) give details on the prices of
stocks currently being traded on the Trinidad & Tobago Stock Exchange. The price paid for any stock
will be the closing price of the last trading day
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Shares may be sold at any time. Any increase in the closing price of the share at the time of selling
will constitute the capital gain and will form part of the return on investment. Dividends earned will be
determined from historical data and applied at the end of the period.
A charge of 1.625% broker’s fee is applicable whenever shares are bought or sold. Broker’s fees =
number of shares x price per share x .01625
When purchasing shares, total capital needed
= Number of shares x price per share + broker’s fees.
When disposing of shares, net proceeds from the disposal
= number of shares x price per share - broker’s fees
F.
CHACONIA INCOME AND GROWTH FUND
The price of the Chaconia Fund is quoted in US$ and is found in the daily papers together with the quoted
unit price. In calculating the value of funds required to purchase shares in this fund, an exchange rate of
TT$6.15 to US$1 is to be used throughout the game. Dividends and Capital gains will be applied at the
end of the period.
e.g.:
To purchase 100 Shares in Chaconia at a price of US $11.69
The TT equivalent: $11.69 x 6.15 x 100 = $7, 189.35
G. US DOLLAR MONEY MARKET FUND:
The price of the US dollar Money Market Fund is quoted in US$ and is set at a fixed unit price of US$20.00.
In calculating the value of funds required to purchase units in this fund, an exchange rate of TT$ 6.15
to US$1 to be used throughout the game. Since income is credited quarterly in this Fund, the accrued
income will be calculated at the end of each calendar quarter.
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Calculation of Broker Fees
ACQUISITION OF STOCK MARKET SHARES
Calculation of Broker’s Fees
Name of Stock: WITCO
No. of shares to be purchased: 70, Price per share: $24.00
Broker’s Fees = No. of shares x price per share x .01625
= 70 x $24.00 x 0.01625
= $27.30
Total Investment Value (Capital needed for purchase of shares)
= No. of shares x price per share + Broker’s Fees
= 70 x 24.00 + 27.30
= $1, 707.30
Net Value of Investment
= No. of shares x price per share
= 70 x 24
= $1, 680.00
DISPOSAL OF STOCK MARKET SHARES
Calculation of Broker’s Fees
Name of stock: WITCO
No. of Shares to be sold: 50
Price per share: $24.00
Broker’s Fees: = No. of shares x price per share x .01625
= 50 x 24.00 x 0.01625
= $19.50
Net proceeds for Disposal (Funds available for acquisition of other assets)
= No. of shares x price per share - brokers fees
= 50 x 24.00 - 19.50
= $1, 180.00
Please note that when buying and selling shares the price used is always the closing quotation of the date of
the transaction i.e. Wednesday’s trading which will appear in the Thursday’s daily newspapers. Incorrect share
prices result in inaccurate broker’s fees, net investment value, total investment value and net proceeds from
liquidation.
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10
Savings Deposit
First Unit Scheme
Second Unit Scheme
Ansa McAL
Chaconia
US$ Money Market
SV
SI
S2
SM
CH
UM
$20.00 US
20
SV - SAVINGS DEPOSIT
FD - FIXED DEPOSIT
S2 - SECOND UNIT SCHEME
SM - STOCK MARKET
SI - FIRST UNIT SCHEME
CH - CHACONIA
UM - US DOLLAR MONEY MARKET FUND
$12.00
$9.82 US
100
$20.00
$11.45
-
300
235
180.96
-
-
Fixed Deposit
FD
-
Transaction detailsNo. of units/shares Unit/share price
Code
Date:
SCHOOL CODE: 0000
SCHOOL NAME:
-
-
$58.50
-
-
-
-
Brokers fees
Trinidad And Tobago Unit Trust Corporation
Investment Game
Initial Portfolio Statement
$6.15 TT
$6.15 TT
-
-
-
-
-
Exchange rate
6.50%
-
-
8%
-
3%
6.25%
Interest Rate
$20,000.00
$2,400.00
$5,892.00
$3,658.50
$4,700.00
$2,072.00
$777.50
$500.00
11/10/02
11/10/02
11/10/02
11/ 10/02
11/10/02
11/10/02
11/10/02
Total value invested Transaction date
dd/mm/yy
11/04/03
Maturity date
dd/mm/yy
SPECIMEN
11
1
Ansa McAL
First Unit Scheme
SM
S1
SV - SAVINGS DEPOSIT
FD - FIXED DEPOSIT
S2 - SECOND UNIT SCHEME
SM - STOCK MARKET
SI - FIRST UNIT SCHEME
CH - CHACONIA
UM - US DOLLAR MONEY MARKET FUND
80.96
100
Transaction details No. of units/shares
Code
Disposal of Assets
Date:
SCHOOL CODE: 0000
SCHOOL NAME:
$10.90
$14.00
Unit/share price
-
$22.40
Brokers fees
Trinidad And Tobago Unit Trust Corporation
Investment Game
Portfolio Change Request
-
Exchange rate
-
Interest rate
$2,259.71
$882.46
$1,377.25
Net proceeds from liquidation
dd/mm/yy
Transaction date
SPECIMEN
12
-
$20.00
-
-
100
Savings Deposit
Second Unit Scheme
SV - SAVINGS DEPOSIT
FD - FIXED DEPOSIT
S2 - SECOND UNIT SCHEME
SM - STOCK MARKET
SI - FIRST UNIT SCHEME
CH - CHACONIA
UM - US DOLLAR MONEY MARKET FUND
SV
S2
Code
Brokers fees
Unit/share price
No. of units/shares
Transaction details
Acquisition of Assets
SCHOOL CODE: 0000
SCHOOL NAME:
Date:
Trinidad And Tobago Unit Trust Corporation
Investment Game
Portfolio Change Request
Interest rate
8%
3%
Exchange rate
-
$2,259.71
$259.71
$2,000.00
Total value
invested
Transaction date
dd/mmlyy
Maturity date
dd/mm/yy
SPECIMEN
13