Computer-Driven Investment Models Can Be Very Effective When the Market

question 70

Multiple Choice

Computer-driven investment models can be very effective when the market behaves as it has in the past. However, in terms of historical consistency, they are vulnerable to failure in the face of:

• A) brute force attacks.
• B) black swans.
• C) zero-day exploits.
• D) over-engineering.
• E) distributed denial of service.

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Definitions:

Annuity

A financial instrument that provides a consistent series of payments to a person, often utilized as a source of income for retired individuals.

Equivalent Cash Flows

Streams of equal value cash flows occurring at regular intervals.

Hurdle Rate

The minimum rate of return on a project or investment required by a manager or investor to proceed with the project.

Present Value

The present value of a future amount of money or series of cash flows, using a certain return rate.