Data collection and transformation

The stock price information was readily available from multiple sources. The modeler stored the stock price over the last couple of years. This information was collected on a daily basis. While getting the historical price movement wasn't a challenge, assessing which predictor variables could be important for the model was definitely intriguing. The modeler decided to use a bunch of financial ratios, econometric variables, and competitor-related information to build the model.

Financial ratios were important, as Mr. Jefferson wanted to test the significance of ratios used in the industry to predict the share price. A portfolio manager should always assess these sorts of ratios. The manager may decide to ...

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