Acg 6175 Study guides, Class notes & Summaries

quantitative investment strategyany strategy which picks stocks to buy/sell based on an observable criteria where the strategy is followed "blindly" examples of quantitative investment strategies1. Buy all stocks that have gone up more than 10% in the last year 2. buy all stocks which paid dividends in the last year 3. buy all stocks in the S&P 500, but weight them equally, rather than by market capitalization, as the index does rebalancingneed to have time period for which we will h...

Why do we use financial ratios? Extract economic relations from the data- Mitigate "information overload" • Evaluate current and past performance of firm • Assess future performance of firm downfall of ratios Managers know investors fixate on certain ratios, and many windowdress accordinglySome Caveats of Ratio Analysis common size analysis Comparison of different-sized firms in the same industry when analyzing a firm's financial statements. The restatement of financial statemen...

time series analysiscomparing firms ratios over time cross sectional analysiscomparing a firm's ratios with other firms common size analysisexpresses each line of the balance sheet or income statement as a percentage of the base amount (for one year) percentage change analysisA technique to analyze a business's financial statements that expresses the year-to-year changes in income statement items and balance accounts as percentages ROANet income + (1-tax rate)(interest expense) + min...

Quantitative investment strategya strategy that buys/sells stocks based on observable criteria where the strategy is followed blindly rebalancinginvesting the proceeds from an old stock into a new one backtestingsimulating how a strategy would have performed if we had been following it historically market neutral portfoliodesigned to generate a consistently positive return long portfoliosoutperform an index

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