Iowa Electronic Markets
Henry B. Tippie College of Business
W283 PBB
University of Iowa
Iowa City, IA 52240
iem@uiowa.edu



         IPSM ANNOUNCEMENT:  PRESIDENTIAL PLURALITY MARKET

     At 10:00 am Friday, July 10, 1992, the Iowa Political Stock Market (IPSM)
will open trading in a market based on the winner of the Presidential election.
This document describes the Presidential Plurality Market and should be viewed
as a supplement to the "TRADER'S MANUAL" for the "IPSM - IOWA POLITICAL STOCK
MARKET:  AN ELECTION MARKET FOR THE 1992 DEMOCRATIC NOMINATION AND U.S.
PRESIDENTIAL ELECTION".  Except as specified in this supplement, trading rules
for the Presidential Plurality Market are the same as for the Democratic
Nomination and Presidential Election Markets.  

Payoffs in this market are determined solely by the candidate who receives the
largest number of popular votes in the November 3rd election.  Dividends are
NOT affected by the outcome of the electoral college or any vote taken by the
House of Representatives should such vote be necessary.  In contrast to the
Election and Perot markets which also depend on the popular vote outcome but
in which dividends depend on the share of the vote, shares in the plurality
winner in this market will earn 1 dollar each and shares in the other
candidates will earn nothing.

CONTRACTS  --  The financial contracts traded in this market are:
          Code            Contract name  
          P.BU          George Bush - Republican
          P.CL          Bill Clinton - Democrat
          P.PE          Ross Perot - Independent

All three contracts carry the label of a specific candidate for ease of
identification; in all three cases, however, the contract represents the party
rather than the candidate.  Specifically, the contract designated "Ross Perot
- Independent" represents any person who is NOT a nominee of either the
Democratic Party or Republican Party.  And should either George Bush or Bill
Clinton not become the nominee of the Republican or Democratic party,
respectively, or should he subsequently drop out of the race and be replaced
by another nominee from the party, shares in the contract shall automatically
transfer into shares of his replacement.

DIVIDEND DETERMINATION  -- Dividends in this market will be determined as
follows:  Shares in the candidate who receives the largest number of popular
votes nationwide will be paid $1.00 per share.  Shares in the other two
contracts will be declared worthless.  Note that although the contract "P.PE"
represents any independent or third party candidate, only votes for individual
candidates, as opposed to the sum of all independent and third party votes,
will be counted in the determination of the plurality winner.  As with the
Presidential Election Market, this market will close at 9:00 a.m. on Wednesday,
November 4, the day after the Presidential election.  As soon thereafter as
official election returns are announced, dividends will be declared and all
funds invested in the market will be redistributed to market participants.  

UNIT PORTFOLIOS  --  Unit portfolios, consisting of one share of each of the
three contracts listed in the market, can be purchased from or sold to the IPSM
system at any time.  The price of each unit portfolio is $1.00.  Use the
"Purchase" option from the TRADING MENU and enter "$PLU" as the name of the
contract to buy unit portfolios.  Use the "Sell" option from the TRADING MENU,
with "$PLU" as the contract name, to sell unit portfolios.  Purchases will be
charged to your cash account and sales will be credited to your cash account.

Unit portfolios may also be purchased from and sold to other traders at current
market prices.  Use the Purchase and Sell options as above but enter "MPLU" as
the contract name.  The price charged for such purchases will be determined as
the sum of current ask prices, and the price paid for such sales will be the
sum of current bid prices.  Should no corresponding bid or ask be present for
one of the candidates, shares in that candidate will be excluded from the
portfolio; otherwise the number of shares purchased or sold will be the same
in each candidate.

MARKET ACCESS  --  Current and newly enrolled IPSM traders will automatically
be given access rights to Presidential Plurality Market.  Access is achieved
via the "Market Selection" option on the Login, Market and other Menus.  Funds
in a trader's cash account are fungible across all markets so new investment
deposits are not required.  Additional investments up to the maximum of $500
can be made at any time, however, and with a five day advance notice funds may
be withdrawn and the account closed on the 15th of any month.