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



            IEM PROSPECTUS: 1994 VIRGINIA SENATE RACE
               [GENERAL ELECTION(CANDIDATES) MARKET]
                         VOTE SHARE MARKET

     At 10:00 a.m. (E.S.T.) Monday, January 31, 1994, the Iowa
Electronic Market (IEM) will open trading in a market based on
the percentage of votes received by each candidate in the 1994
Virginia Senatorial Election.  This document describes the
Virginia Senate General Election (Candidates) Market, and should
be viewed as a supplement to the IEM Trader's Manual.  Except as
specified in this supplement, trading rules for the Virginia
Senate Race [General Election] Market are the same as for other
markets in the IEM.

Payoffs in this market are determined by the percentage of the
total popular vote each candidate receives in the November 8
general election.  Thus, for example, contracts for a candidate
receiving 32.4% of the popular vote will be worth 32.4 cents.

CONTRACTS -- The financial contracts traded in this market are: 

          Code Contract Name

          MIL  James Miller
          NOR  Oliver North
          ROB  Charles Robb
          ROF  Rest of Field

This market will close at 11:59 p.m. on election eve, Monday,
November 7, 1994.  As soon after the election as official
election returns are announced, liquidation values will be
declared and funds distributed by mail to market participants. 

DETERMINATION OF LIQUIDATION VALUES -- Liquidation values in the
General Election (Candidates) Market will be determined as
follows.  For each contract in any candidate that a trader owns
at the close of the market, the trader will receive $1.00 times
the candidate's share of the vote.  For example, if unnamed ROF
candidates receive 12% of the vote, ROF contracts will pay 12
cents.  Note that these vote shares necessarily sum to one.

UNIT PORTFOLIOS -- Unit portfolios, consisting of one of each of
the four contracts listed in the market, can be purchased from or
sold to the IEM system at any time.  The price of each unit
portfolio is $1.00.  Use the "Purchase" option from the TRADING
MENU and enter "1$" as the name of the contract to buy unit
portfolios.  Use the "Sell" option from the TRADING MENU, with
"1$" 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 "MKT" 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, contracts in that candidate
will be excluded from the portfolio; otherwise the number of
contracts purchasedor sold will be the same in each candidate.

MARKET ACCESS -- Any trader who registers to participate in the
Virginia Senate Race Markets will automatically be given access
rights to the General Election (Candidates) 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.