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    Friday, November 9, 2018

    Financial Alpha testing subgroups

    Financial Alpha testing subgroups


    Alpha testing subgroups

    Posted: 09 Nov 2018 07:28 AM PST

    So i've been calculating alphas of different subgroups of mutual funds. Now that I have them, ive used the GRS test to test whether theyre jointly significantly different from zero, but im wondering if i can just use a simple T-test to test one subgroup of alphas vs another subgroup? Or is there some other test i should use?

    submitted by /u/HiImSammie
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    Want to make sure my understanding of bonds is correct

    Posted: 09 Nov 2018 09:38 AM PST

    So from what I understand, a bond is the money you pay to a company and they pay you back by maturity date. For example, I was looking at a bond and it said the last trade price was $130, the interest rate is 7% (making the amount interest $70 annual) it was issued in 2002 and matures in 2032. If the interest is 70 annually then over the 30 years you will get $2,100 in interest. It is a corporate bond so there is tax on interest, I didn't calculate that just for this example because I already understand that. Then, you will get $1000 at maturity because of the face value? So basically you bought it for $130 and then you make a $3,100 ($2,970 profit) by the 30 years later? Please tell me where I am wrong, it in correct, if I'm missing soemthing.

    submitted by /u/joeystricker
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