Describe the variation of the ROAs(Return on Assets) as follows: The variation of X is calculated as follows: Linear regression allows us to test hypotheses about the relationship between two variables by quantifying the strength of the relationship between the two variables and to use one variable to make predictions about the other variable. Estimating…
Four key assumptions to be able to draw valid conclusions from a simple linear regression model:
Analysis of Variance Breaking Down the Sum of Squares Total into Its Components Measures of Goodness of Fit Hypothesis Testing of Individual Regression Coefficients Hypothesis Tests of the Slope Coefficient Hypothesis Tests of the Intercept Hypothesis Tests of Slope When the Independent Variable Is an Indicator Variable Test of Hypotheses: Level of Significance and p-Values
The Log-Lin Model The Lin-Log Model The Log-Log Model Selecting the Correct Functional Form
Fintech generally refers to technology-driven innovation occurring in the financial services industry. Big Data The term Big Data typically refers to datasets that have the following characteristics: Sources of Big Data Big Data, therefore, encompasses data generated by the following: The three main sources of alternative data are
Gross and Net Return A gross return is the return on assets managed less any trading expenses and commissions. Gross return is intended to reflect the investment skill of the manager. Net return is a measure of what the investment vehicle (e.g., mutual fund) has earned for the investor. Net return accounts for (i.e., deducts)…
Non-annual Compounding In general, with more than one compounding period in a year, we can express the formula for present value as follows: where m = number of compounding periods per year, RsR_s = quoted annual interest rate, and N = number of years. Annualising Returns A general equation to annualise returns is given, where…
