Demonstration: How Stock Prices Move
Prices within this simulation change based on the supply and demand of the shares (as students buy and sell shares). This is no different than the real stock market. However, the students (investors) in this simulation represent the entire investing population, and this is certainly not the case in the real world. To make this situation more realistic, the instructor of the simulation will act as "the rest of the world's investors". Here is how it works.
- After evaluating students' business plans, the instructor has the option to influence prices through some simple processes. Alternatively, the instructor can choose to do nothing at all and let prices fluctuate based on the second factor.
- Students will buy and sell shares causing fluctuations to this estimated price. Buying causes the price to rise; selling causes a drop in price.
Now that you understand the premise of the simulation and how prices will move, it is time to learn how the companies in simCEO will be created.