On "Grade the Trade" we test the trading prowess of some of the most promising business students in the nation. This week they’re from Texas Christian University, University of Miami, University of Southern California and University of San Diego.
Get ready – school’s in session.
Our business school students have been given the questions in advance, and have 30 seconds to answer.
Grad #1: Lauren from the Neely School of Business at Texas Christian University.
Lauren is a member of the William C. Conner Educational Investment Fund.
Here’s the scenario: Coke (KO) and Pepsi (PEP) decide to follow Jones Soda’s (JSDA) lead and switch from high fructose corn syrup to pure cane sugar in all of their sodas. What are you buying, what are you selling as this scenario unfolds?
Lauren says she’s neutral Pepsi because of their larger product base but selling Coke because sugar is more expensive. She’s also shorting high-fructose syrup producers such as ArcherDaniels Midland (ADM) and Corn Products International (CPO) and she’s buying sugar suppliers such as Imperial Sugar (IPSU).