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Product Overview

Bond Trader is a simulation designed to help students experience the dynamics of financial market behavior by putting them in a simple simulated securities market. Bond Trader serves as an engaging introduction and powerful illustration of such foundational themes as time value of money, equilibrium-required return, the yield curve, market efficiency and the pricing of information, financial substitutes and arbitrage-based security pricing, bond math, and financial market mechanics. In the simulation, students compete in teams or individually to maximize the value of a trading portfolio by choosing when to take positions in bond securities and when to hold cash. Student performance is ranked against their peers. Students make weekly buy-and-sell decisions with weekly trading periods of 10-15 seconds. Bond prices are dynamically determined based on the aggregate buy-and-sell order flow from student and randomized computer traders in the market using an Internet-based interface. Bond Trader has been used effectively in Darden's first-year corporate finance course and is designed to work as an effective introduction to any standard corporate finance or investments curriculum.

Learning Objectives

Motivate fundamental themes of finance, including time value of money, .