Students post small loss on cash investments

Finance students at the University of Nevada, Reno, given $100,000 to make classroom exercises real, posted a 1 percent loss in about 90 days of trading.

Even so, the students outperformed the wider market averages, which were down about 2.5 percent during the period, said their teacher, Ali Nejadmalayeri, an assistant professor of finance.

And he said the students' performance was dampened by transaction costs that ran 3.5 percent something above the level they might pay at a discount brokerage.

Those costs will be adjusted for future classes that invest the cash.

The cash invested by the students was provided in February by Jack McLeod, a senior vice president and investment officer with Wachovia Securities in Reno.

McLeod said last week he was pleased with the results of the donation.

"No wooden guns for these kids," he said.

"They're working with live ammunition."

Nejadmalayeri said students slowly became aware of the implications of using cash.

"When we started, they were quite excited to take risks," he said.

"But toward the end, they became quite conservative."

McLeod, meanwhile, said he plans to raise more money for UNR investment classes.

"I'll be shaking the trees this autumn," he said.