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 ...
