Financial Education » Quantitative Analysis http://financial-education.com Everything You Need To Know About Finance Thu, 04 Nov 2010 03:41:54 +0000 http://wordpress.org/?v=2.8.1 en hourly 1 The Pros and Cons of Fundamental Indexing http://financial-education.com/2008/04/04/the-pros-and-cons-of-fundamental-indexing/ http://financial-education.com/2008/04/04/the-pros-and-cons-of-fundamental-indexing/#comments Fri, 04 Apr 2008 12:11:09 +0000 William Trent http://financial-education.com/2008/04/04/the-pros-and-cons-of-fundamental-indexing/ Fundamental indexing strategies attempt to form benchmarks based on fundamental factors such as book value, dividends or earnings rather than market capitalization. Proponents claim that the fundamentals provide a less biased estimate of a security’s fair value, and thus explain the value premium. Detractors claim that the strategies are simply “value investing in a shiny new wrapper.”

In the January/February 2008 Financial Analysts Journal,  Kaplan argues both fundamental and market-cap weightings provide valuable information, and argues in favor of approaches that combine both.

]]> http://financial-education.com/2008/04/04/the-pros-and-cons-of-fundamental-indexing/feed/ 0 Hedge Fund: Kurtosis Definition & Explanation : Hedge Fund http://financial-education.com/2008/03/22/hedge-fund-kurtosis-definition-explanation-hedge-fund/ http://financial-education.com/2008/03/22/hedge-fund-kurtosis-definition-explanation-hedge-fund/#comments Sat, 22 Mar 2008 13:22:49 +0000 William Trent http://financial-education.com/2008/03/22/hedge-fund-kurtosis-definition-explanation-hedge-fund/ Written by Richard Wilson in his Hedge Fund Blog

Kurtosis Definition: In probability theory and statistics, kurtosis from the Greek word kurtos, meaning bulging is a measure of the “peakedness” of the probability distribution of a real-valued random variable. Higher kurtosis means more of the variance is due to infrequent extreme deviations, as opposed to frequent modestly-sized deviations.

The blue distribution exhibits higher kurtosis.

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