Risk Manager Interview Questions

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Assume you can predict the future return of a stock based on the price earning ratio, you test the model on every company of the market over the last 20 years. You see that on average it works and you conclude that you should use the model. What is the mistake you are making by doing so ?
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Risk Intern

Interviewed at Mercuria Energy

3.5
Aug 15, 2019

Assume you can predict the future return of a stock based on the price earning ratio, you test the model on every company of the market over the last 20 years. You see that on average it works and you conclude that you should use the model. What is the mistake you are making by doing so ?

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