Question: Figure includes a box for the econometrics unit. Item (3) is to help other units. What sorts of specific tasks might thisentail? Customers Product Final

Figure includes a box for the econometrics unit. Item (3) is to €œhelp other units.€ What sorts of specific tasks might thisentail?

Customers Product Final Risky Portfolio Feedback Overall Portfolio Manager 1. Mix active and passive portfolios 2. Monitor performance of active portfolio 3. Monitor performance of passive portfolio Control Is final portfolio super-efficient? Feedback Product roduc Active Portfolio Passive Portfolio Feedback Forecasts Active Portfolio Manager 1. Form active portfolio 2. How good are alpha forecasts? 3. How good are betaresidual Passive Portfolio Manager Form passive portfolio at minimum cost Data Control Is alpha positive? variance estimates? Data Data Feedback Feedback Control s correlation with market 1? FeedbackFeedback Quality Control 1. Keep forecast records 2. Estimate quality 3. Adjust forecasts For imates Micro Analyst Econometric Unit 1. Estimate betas 2. Estimate e) 3. Help other units Estimate alpha values Feedback Macro Analyst Estimate Forecasts Estimates and Help with Statistics Forecasts ER O(M)

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Following are the task econometrics unit involves 1 Help macro forecaster in forecasting asset allocation and for setting up view for BL model 2 Helps quality control unit in estimation of forecasting record 3 Provides resource for solving statistical problems faced by other units Econometric models are the application of statistics and other mathematical models in economic theory Their main aim is to forecast ... View full answer

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