Stock Simulation Aids Business Education

Math phobia is real and good teachers know it can hamstring academic progress. Dr. Byron Hollowell, assistant professor of finance at Penn State Worthington Scranton wanted to create a teaching tool that made a quantitative course relevant to his Finance students, put math phobia on the shelf and help them to excel. He thinks he may have found it.

"Students often come to quantitative classes, like investments, with a built in math aversion," he said. "This approach utilizes an investment simulation that endows each student with $500,000 to invest in stocks, bonds, futures and options with a real brokerage account.  Students are allowed 120 trades throughout the semester and they can phone, fax or execute their trades online.

"What makes the Worthington Scranton approach unique is that the $500,000 investment portfolio project is integrated into every aspect of the course. This is accomplished by implementing a graduate level, project-based learning (PBL) pedagogy used by many top MBA programs.  Under this teaching methodology," says Dr. Hollowell, "there is no lecturing, memorizing facts, or exams.  However," he cautions, "students are challenged to read, synergize, and create investment knowledge at a rapid pace, because the semester project is alive and seems to take on a life of its own from one day to the next."

Dr. Hollowell adds that no one can predict from day to day where the market is going to be or what economic news will shock students' portfolios. "So we have to cover investment topics that are relevant for that day," he says, "in a "just-in-time" format.

"Many of their issues can not be solved by reading a book or by reviewing a PowerPoint slide," says Dr. Hollowell. "New knowledge and investment strategies have to be created on the spot because book theory doesn't always actually work in real life.  Every day before class, I eat a few Maalox since classes are so unpredictable and challenging for the student and for me," he adds.

Dr. Hollowell's students work on a $500,000 retirement portfolio. "They take this very seriously. We found," he says, "that the cumulative and consistent nature of the semester project serves as an excellent vehicle for them to master course learning objectives. Further," he adds, "the nature of the simulation drives them beyond the course work into a zone where they forget about grades. This type of experiential learning encourages our students to utilize higher learning domains."

Dr. Hollowell's finance students at Penn State Worthington Scranton are exceeding his expectations. He cites, "whereas 90 percent of the students had no investing experience before working on the project, now over sixty percent of the students are beating national market benchmarks. Further, 25 percent of the students are beating the professionals on Wall Street."

Dr. Hollowell will present his innovative teaching method at University Park on April 8th   at the Penn State Symposium for Teaching and Learning with Technology: A Symposium of Faculty Excellence. He will offer his remarks in a specific forum called "New Educational Technologies That Enhance the Classroom Experience."   

Dr. Hollowell's presentation will demonstrate how using a cumulative investment simulation helps to generate student motivation and efficacy. An emphasis is placed on integrating the $500,000 investment simulation throughout all lectures, in-class finance labs, group work, study assignments, and semester projects.

Hollowell noted that the investment simulation fosters friendly competition, since students can track their progress relative to peers within their own classroom and across 200 investment classes from around the country.

He found that the simulation technology has been especially effective in helping break down existing barriers to entry for under-represented groups in finance like women, minorities, and first-generation college students.

Dr. Hollowell joined the faculty of Penn State Worthington Scranton in fall of 2005. His research interests focuses on the areas of agency theory, banking efficiency, mergers and acquisitions, executive compensation, ethics, corporate control, initial public offerings, the scholarship of teaching and learning and adult learning theory.

While in industry, Dr. Hollowell served as assistant controller at Guardian Bank, Boca Raton, FL and was an actuary with the American International Group in New York City. He also served at J.P. Morgan, Inc. where he focused on international mergers and acquisitions as a Wall Street financial analyst.

Dr. Hollowell's academic service credentials are varied and active and include his service as co-president of the Los Angeles Investment Banking Board. He resides in Clarks Summit, PA.