POLITICAL STOCK MARKET TESTED IN IOWA
Can a stock market predict elections better than polls? Two University of Iowa professors batted .500 this week in two United States Senate races. They had set up a mock stock exchange in which students, faculty, and staff could buy ``stock'' on specific candidates. Stock of Sen. Tom Harkin traded at a 6.5 percent premium Monday night. The Iowa Democrat won the election by a similar margin: 8 percent.
But stock of Sen. Paul Simon (D) of Illinois showed him only a 19-point winner; he won the state by 30 points.
``We have been worried about market thinness'' in that race, says economics professor Bob Forsythe. Only 36 of the market's 205 participants traded the Illinois stocks. Dividend checks to the winning traders go out Monday.