Essay On Application Of Machine Learning In Finance

Undoubtedly, the overall prediction accuracy is very important for the banks when making predictions. However, we might consider which type of mistake we would like to avoid more. For the banks, not issuing loans to people who are actually going to repay would only cause a small loss on interests. However, issuing loans to people who are going to default would cause a big loss on the unpaid loans. Thus, it is reasonable to believe that accurate selection of people who are going to default is of higher priority to the banks. In light of this belief, QDA is also worth considering to the banks. A byproduct during the classification is the importance table produced by the random forest, which is shown

I had the opportunity of listening to a lecture by one of the hosts of “Freakonomics”, a podcast that analyzes the irregularities present in the economy. In Steven Levitt’s lecture, I was given advice to start pursuing my interests early, which led me to apply for a seminar with Morningstar- a company which specializes in fund investing. Like my microeconomics class, this seminar gave me the opportunity of expanding my knowledge in the basic principles. Furthermore, I was also taught the basics of the stock market. Towards the end of the course, my peers and I took a trip to the Morningstar tower, and I was intrigued by the goals that every worker pursued, which was to provide accurate data of which stocks would prove to be good investments.

I believed financial sector is one of the fastest growing and most influential elements in our modern society and economy. Financial professionals help companies and organizations stay on top of their own finances, which is a top priority in the wake of the recession. The growing of financial services in the world has brought massive opportunities to utilize newer principles, methodologies, tools and practices in the field of finance. It is this challenging field in which I would like to gain expertise.

An American call option gives one the right, but not an obligation, to buy a specified number of shares of a stock for a specified price called exercise or strike price before the maturity date or on

“The book beating the street is a book published by one of the most if not the most legendary money managers ever the book talks about stocks and other forms of investments that you can utilize and make useful for your investment endeavors. The three key aspects that are addressed in his book are:

The financial services industry is an economic sector that provides different kinds of products of varying nature to customers and institutions. Some of the major players in this industry include banks, investment brokers, consumer and commercial lenders, stock exchanges, collection agencies, venture capital investors, asset managers, and investment brokerage firms. Generally, these financial institutions tend to be diverse to an extent that they fit into varying risk profiles. These financial firms offer products and services that

Big data: Faster, cheaper computing power enables risk functions to use reams of structured and unstructured customer information to help them make better credit risk decisions, monitor portfolios for early evidence of problems (The future of Bank Risk Management,

After reviewing the balance sheet for Patton-Fuller Hospital for 2008 and 2009, there are significant differences that are noticeable. The retained earnings (or "Net Worth" or "Unrestricted Fund Balance") drastically decreased from 2008 to 2009 (Apollo Group, 2006). The dollar amount decrease is -209,471, this makes a decrease of over 65%. Long-term debt increase to more than 116% from 2008 to 2009 as well (Apollo Group, 2006). This is a massively huge increase. Total current liabilities also increase as a whole by 184.09%

In 1949 Alfred Winslow Jones, a sociologist investigating fundamental and technical research to forecast the stock market for Fortunemagazine, set up an investment fund with himself as general partner. The fund followed three key tenets: (1) always maintain short positions, (2) always use leverage, and (3) only charge an incentive fee of 20 percent of profits with no fixed fees. Jones called his portfolio a “hedged” fund (eventually shortened to “hedge fund”) because he had short positions to offset his long positions in the stock market. Theoretically, the overall portfolio was hedged against major market moves.

however, Poland, Switzerland, Netherlands, Scandinavia, Italy and Hungary were offset by turn down otherwise it would have been increased more by £119 million or 16% whereas, the volumes rose 6% to 130 billion. Profit in Eastern Europe has fallen by £59 million to £409 million due to lower volumes by 4% than previous year. Russia, Uzbekistan, Ukraine and Romania were mainly had lower performance. In Africa and Middle East, the profit has increased by £211 million to £724 million where it could have been increased by 28%.

How data mining can assist bankers in enhancing their businesses is illustrated in this example. Records include information such as age, sex, marital status, occupation, number of children, and etc. of the bank?s customers over the years are used in the mining process. First, an algorithm is used to identify characteristics that distinguish customers who took out a particular kind of loan from those who did not. Eventually, it develops ?rules? by which it can identify customers who are likely to be good candidates for such a loan. These rules are then used to identify such customers on the remainder of the database. Next, another algorithm is used to sort the database into cluster or groups of people with many similar attributes, with the hope that these might reveal interesting and unusual patterns. Finally, the patterns revealed by these clusters are then interpreted by the data miners, in collaboration with bank personnel.4

This project proposal will set out to influence Westpac’s decision in funding the most effective data-mining model. This model will help to differentiate the financial institutions products in the current saturated market. Westpac must appeal to all demographics and it is extremely important to develop products for the growing generations. The model proposed will analyse the institutions current historical data to shed light on the risk of lending a loan to millennials. By discussing past studies and research, the report will analyse how others have struggled to deal with this exact problem. The data-mining model will follow the Cross Industry Process for Data Mining (CRISP-DM) Methodology to present the proposal. The document also includes a plan and timetable to highlight how doable this task will be.

Keywords: hedge fund, hedge fund manager, hedging, mutual fund, investment, investors, loan, capital, interest, return, Ponzi scheme

As of 2014, more than 11,000 hedge funds are managing more than $2.6 Trillion in assets (De Pol, 2015). The statement itself speaks how important these hedge funds are in the global financial market. They provide investors with opportunities to achieve gains and manage risks. Hedge funds provide liquidity and make financial markets more efficient. These funds can be operated with extreme flexibility and play an important role in financial innovation and reallocation of financial risk (Rubin et al, 1999). Although it sounds good, hedge funds took a hit during the 2008 crisis. Along with the credit crisis came Madoff fraud, the biggest investment scam in 2008. Investors started looking at these funds as high risk, highly leveraged investment vehicles that lacked transparency. Since mid-2009 hedge funds have picked up and strategies are being improved for better risk management, transparency and gaining confidence of investors.

"Mantas Scenarios are already coded, tested, and ready to use, enabling customers to realize benefits much sooner than with other, more time-consuming alternatives. There is no learning stage, or fuzzy-adaptive-black box scheme to run. We code it in right from the start because we understand the business and the business user. Mantas gives financial institutions and communications service providers the ability to monitor and analyze customer, performance and transaction information across the entire organization for a complete and accurate picture of behaviors of interest. As a result, it 's now possible to detect suspect behavior early enough to mitigate risk, report and prioritize findings without manual intervention, comply with changing regulations, increase revenue by improving