New Financial Lab in Mervis Hall to Simulate Global Financial Markets

Pitt’s Joseph M. Katz Graduate School of Business has added a state-of-the-art financial lab to Mervis Hall. The $2.3 million facility will give students access to real-time stock market data and to professors who are experienced in global financial markets. Kuldeep Shastri (above), the Roger S. Ahlbrandt Sr. Endowed Chair in Finance and professor of business administration at Katz, will teach a course in the spring on market microstructure and trading. Using the lab “brings a lot more reality into classroom discussions,” he says.

The University of Pittsburgh Joseph M. Katz Graduate School of Business has added a key tool to its experience-based learning curriculum: a new state-of-the-art financial laboratory. The lab, which features a financial trading simulator, stock tickers, tote display boards, 58 computer stations, live news feeds, and classroom space, provides students with real-time stock market data and access to faculty who are seasoned in global financial markets.

John Delaney, dean of the Katz School and the College of Business Administration (CBA), made it a priority to put plans for the financial lab into motion upon joining Pitt in 2006. The recently completed construction of the $2.3 million, 3,000-square-foot lab in Mervis Hall will be used in courses tailored to give students a serious glimpse into the world of financial markets.

While finding trading rooms at business schools is not uncommon, most schools are not using the technology to its full potential, says Kuldeep Shastri, Roger S. Ahlbrandt Sr. Endowed Chair in Finance and professor of business administration at Katz.

“It’s not about which schools have trading rooms—it’s about which schools are using them properly as learning tools,” says Shastri.

To help students become more responsive to breaking news, an up-to-the-minute Reuters news feed has been installed in the trading room.

“We know that as major news stories come out about the economy, markets react to them,” says Shastri. “The lab allows us to show students a breaking news announcement and its effect on the market in real time. It brings a lot more reality into classroom discussions.”

Shawn Thomas, a professor of business administration and the Katz School’s finance faculty interest group coordinator, says new courses are being developed to take full advantage of the learning opportunities that lie within the lab. The courses will be geared toward both CBA upperclassmen and Katz students and will use software to develop analytical solutions to issues that arise in various areas of finance, he says.

Shastri, for example, will teach a spring semester course on market microstructure and trading in the lab. The trading room’s simulator software will provide a dose of reality by adjusting the price of the students’ virtual market, for example, to reflect the students’ buying and selling decisions.

A feature that truly exemplifies the capabilities of the lab is one that allows students to use technology to test their own market strategies with historically accurate data. Once refined, the developed strategies can then be applied and tested with real-time data.

Thomas says the business school faculty and administration felt strongly about installing a financial lab so Pitt students can compete successfully with graduates of schools with similar learning environments.

“The lab will allow students to develop the competencies they’ll need for careers in finance,” says Thomas. “It will allow them to hit the ground running. They’ll be familiar with the analytical tools and software commonly used in Wall Street trading rooms and corporate finance institutions at the highest levels.”

Marios Panayides, an assistant professor of finance in the University of Utah’s David Eccles School of Business, will join Pitt as a visiting professor this fall to teach a course on financial modeling. He says he plans to help the students become comfortable using financial models in Excel.

“‘Learning by doing’ is a highly effective way of gaining deeper insights into financial models,” says Panayides. “Most of the corporate world requires finance graduates to have a deep knowledge of spreadsheets and Excel along with basic financial modeling. The class meets both demands.”