Why should analysts be cautious when using historical data for forecasting, and how can they address limitations arising from regime changes?
Analysts must be cautious with historical data because: Past data may not represent future conditions due to changes in technology, politics, regulation, or major disruptions (e.g., wars, policy shifts). Statistical…
What are common sources of data measurement errors and biases analysts should be aware of, and how do they affect investment analysis?
Analysts must recognize several common data issues that can distort investment analysis: Transcription errors: Mistakes made when recording or inputting data, leading to inaccurate datasets. Survivorship bias: Occurs when data…
Why must analysts be cautious when using economic data for forecasting, and what are some common limitations associated with such data?
Analysts must be cautious with economic data because it often has time lags, revisions, changing definitions, and rebasing issues, all of which can distort analysis and forecasts: Timeliness: Data may…
What are the seven steps in the framework for developing capital market expectations (CME), and what is the purpose of each step?
The framework for developing CME provides a disciplined, structured process to produce consistent and well-reasoned projections. The seven steps are: Specify Expectations and Time Horizon Define which asset classes and…
WHat is the difference bewteen NSFR and LCR:
WHat is the difference bewteen NSFR and LCR: Time Horizon: LCR (30 days) vs. NSFR (1 year) Focus: LCR (Short-term liquidity stresses) vs. NSFR (Longer-term funding stability) Assets Covered: LCR…
Liquidity Coverage Ratio (LCR)
Liquidity Coverage Ratio (LCR) The Liquidity Coverage Ratio (LCR) is a key regulatory requirement under the Basel III framework, designed to ensure banks maintain sufficient high-quality liquid assets (HQLA) to…
Net Stable Funding Ratio (NSFR)
Net Stable Funding Ratio (NSFR) The Net Stable Funding Ratio (NSFR) is a liquidity requirement introduced under Basel III regulations for banks. The NSFR mandates that banks maintain a minimum…
About Dividend Policy 关于股利政策
About Dividend Policy 关于股利政策 A company's dividend policy outlines its approach to distributing profits to shareholders. This encompasses decisions about the form, frequency, and amount of dividends. The sources highlight…
What is the link between higher dividend payouts and lower cost of equity?
The link between higher dividend payouts and lower cost of equity can be explained through the risk-return relationship: Risk Perception and Required Returns Investors view dividend payments as less risky…
About Dividend Policy
About Dividend Policy A company's dividend policy outlines its approach to distributing profits to shareholders. This encompasses decisions about the form, frequency, and amount of dividends. The sources highlight several…