Thread: How to solve example 5.3 step per step?
View Single Post
  #2  
Old 02-28-2015, 08:01 PM
yaser's Avatar
yaser yaser is offline
Caltech
  
Join Date: Aug 2009
Location: Pasadena, California, USA
Posts: 1,478
Default Re: How to solve example 5.3 step per step?
Quote:
Originally Posted by qwertyqwertz View Post
Hi folks,

I wonder how to solve the example 5.3 on page 174? I tried to come up with the right solution, but the outcome doesn't make sense.

These are the given numbers:
Hitrate: 52.1%
Number of test days: 500

The correct result is a cumulative profit of 22%.

How do I get 22%?

Thanks a lot and have a nice day!
The hit rate is the percentage of days you got the direction right, while the profit takes into consideration how much money you made (or lost) when you got the direction right (or wrong). You can read the 22% directly off the figure on page 175 as the final value at day 500.
__________________
Where everyone thinks alike, no one thinks very much
Reply With Quote