Inside the Mind of a Quant, Part 1

Glossary

Alpha: Alpha is used in finance as a measure of performance. Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark which is considered to represent the market’s movement as a whole. The excess return of an investment relative to the return of a benchmark index is the investment’s alpha.

Behavioral bias: Financial behavioral biases are deep-rooted patterns of investor behaviors which, if not managed, can cause a client to make irrational decisions on a regular basis.

Behavioral economics: Behavioral economics, along with the related sub-field, behavioral finance, studies the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and the resource allocation. Behavioral economics is primarily concerned with the bounds of rationality of economic agents.

Emerging markets: 23 emerging economies: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates.

Valuation: A valuation is the process of determining the current worth of an asset or company.

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Exp Date 04/30/2020