Date:4/24/00

Contact:

Dick Followill, UNI head and professor of finance, (319) 273-2929

Mir Zaman, UNI associate professor of finance and Krause Challenge team advisor (319) 273-2579

Vicki Grimes, Office of Public Relations, (319) 273-2761

University of Northern Iowa team finishes first in inaugural Krause Challenge competition

CEDAR FALLS, Iowa — A 12-member team of student investors representing the University of Northern Iowa in the inaugural year of the Krause Challenge competition, captured first place honors with a return of 23 percent on a $100,000 investment.

__(Name) __of __(Hometown)__ is one of 12 members on the team that worked with faculty members Mir Zaman, UNI associate professor of finance, and Dick Followill, UNI head and professor of finance.

In May of 1998, W.A. Krause, president and CEO of Krause Gentle Corp., and its subsidiary, Kum & Go, announced that an endowment, known as “The Krause Challenge,” would be funded by his corporation's foundation. Students in selected finance classes at each of four universities— the University of Northern Iowa, Iowa State University, University of Iowa and Drake University— would have the opportunity to invest $100,000.

At that time, Krause said the intent of the challenge “is to provide students with real-world competition in the stock market and to link them with Iowa companies. Hopefully, with exposure to the Krause Gentle Corporation and other Iowa-based companies, students will envision many entrepreneurial opportunities and pursue careers in Iowa.”

A minimum 25 percent of the Fund's equity must be held in Iowa-based companies or those with a significant presence in Iowa. Companies in which the UNI team invested that are either from Iowa or have strong ties to Iowa, are: Bank of America; FBL Financial Group; Hon Industries, Inc.; Quaker Oats; and Wal Mart Stores. Other investments were with Amgen; Cisco Systems, Inc.; Eli Lilly & Co.; Lucent Technologies; Qualcomm, Inc.; and Starbucks Corp.

“We are delighted to have won this competition and would like to express our appreciation to Krause Gentle Corp. for giving us the opportunity to participate,” said Zaman. “The Krause Challenge gives students the ability to apply to real world situations some of the investment tools and theories they have learned here at UNI.

“The Challenge is all the more important to UNI student participants as a majority of them are also involved with the CFA study program at UNI. This program regularly offers seminars to students in order to prepare them for the Chartered Financial Analysts (CFA) Level I exam as prepared and administered by the Association of Investment Management and Research (AIMR). Involvement in the Krause Challenge supplements the knowledge gained from these seminars and will be beneficial in their future careers as Financial Analysts.”

Followill also views the program as “a tremendous opportunity for our students. They are getting the kind of hands-on experience that would be impossible playing with virtual money. While we do do these activities to supplement some of our classes, we don't do them with real money. This adds another dimension to the learning—all of the decisions really, really count.”

Mark Williams, a UNI senior from Ankeny, had an additional opportunity as part of the Challenge program. He has served as the UNI student representative member of the Krause Gentle board of directors, attending three meetings. He said it was a good learning experience to see how the board of such a corporation works.

“At our November meeting, the student directors made a presentation to the board, similar to what we presented to our local advisory board prior to a stock purchase, including our evaluation process for deciding what stocks to buy,” said Williams. “The market went down 10 percent on the final day of the competition, April 14, so the final figures didn't reflect where the portfolio had been most of this semester. It was a very exciting process to watch.”

“Of course, we're delighted to have won this competition,” said Bill Greer, dean of UNI's College of Business Administration. “But the real value of the Krause Challenge lies in what the students learn about securities and about Iowa companies. The design of this entire effort makes everyone a winner.”

Members of the UNI team's advisory committee are Deb Giarusso, CFA and adjunct instructor in finance; David Sparks, Securities Corp of Iowa; Tim Skahill, A.G. Edwards & Sons; and Zaman.

To obtain a listing of the students, please contact the Office of Public Relations at (319)273-2761.

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