Reading 55: Fintech in Investment Management
50 questions available
Key Points
- Fintech applies technology to financial services.
- Big Data sources: Traditional, Social Media, Corporate Exhaust, Internet of Things.
- Characteristics: Volume (scale), Velocity (latency), Variety (structure).
- Data Science processes: Capture, Curation, Storage, Search, Transfer.
Key Points
- AI simulates human cognition; Neural Networks mimic brain processing.
- Machine Learning: Algorithms learn from data (Training, Validation, Test sets).
- Supervised Learning: Labeled inputs/outputs.
- Unsupervised Learning: Unlabeled inputs, finds structure.
- Overfitting: Model is too complex, fits noise.
- Underfitting: Model is too simple, misses patterns.
Key Points
- Text Analytics: Analyzes unstructured text/voice.
- NLP: Interprets human language (e.g., speech recognition).
- Algorithmic Trading: Automated execution; HFT exploits intraday mispricing.
- Robo-advisors: Low cost, passive/conservative portfolios, automated risk profiling.
Key Points
- Distributed Ledger: Shared database with consensus mechanism.
- Blockchain: Sequential blocks, miners verify transactions.
- Permissionless vs. Permissioned networks.
- Applications: Cryptocurrencies, ICOs, Smart Contracts, Tokenization.
- Benefits: Faster clearing/settlement, reduced counterparty risk.
Questions
Which of the following best defines 'Fintech'?
View answer and explanationData generated by business processes such as bank records and retail scanner data is best described as which type of alternative data?
View answer and explanationWhich of the following characteristics of Big Data refers to the speed at which data is communicated?
View answer and explanationIf a dataset has a size of 5,000 terabytes, this is equivalent to:
View answer and explanationReal-time stock market price feeds are characterized as having:
View answer and explanationWhich of the following is considered an unstructured form of data?
View answer and explanationIn the context of data science processing methods, 'Curation' refers to:
View answer and explanationWhich visualization technique is most appropriate for illustrating the frequency that specific words appear in a text sample?
View answer and explanationComputer systems that are programmed to simulate human cognition are best described as:
View answer and explanationIn Machine Learning, what is the primary function of the training dataset?
View answer and explanationWhich type of machine learning involves input and output data that are labelled?
View answer and explanationA machine learning model that treats noise as true parameters and identifies spurious patterns is said to exhibit:
View answer and explanationThe analysis of unstructured data in text or voice forms, such as evaluating regulatory filings, is best described as:
View answer and explanationWhich fintech application uses computers to interpret human language, specifically for tasks like speech recognition and language translation?
View answer and explanationWhich trading strategy specifically identifies and takes advantage of intraday securities mispricings using computers?
View answer and explanationRobo-advisory services typically offer portfolios with which of the following characteristics?
View answer and explanationWhat is the primary advantage of robo-advisors for customers?
View answer and explanationA potential disadvantage of robo-advisors during crisis periods is:
View answer and explanationIn a distributed ledger, what mechanism is required to validate new entries?
View answer and explanationWhich element links blocks sequentially in a blockchain?
View answer and explanationComputers on a blockchain network that solve cryptographic problems to validate transactions are called:
View answer and explanationWhich type of distributed ledger network allows all participants to view all transactions and has no central authority?
View answer and explanationIn a permissioned network, which of the following is most likely true?
View answer and explanationWhich of the following describes an Initial Coin Offering (ICO)?
View answer and explanationWhat is a potential benefit of using distributed ledger technology for post-trade clearing and settlement?
View answer and explanationElectronic contracts programmed to self-execute based on agreed terms are known as:
View answer and explanationTokenization refers to:
View answer and explanationUnderfitting in a machine learning model means the model:
View answer and explanationWhich of the following is a challenge associated with machine learning results being a 'black box'?
View answer and explanationDeep learning is a technique that typically uses:
View answer and explanationThe 'Internet of Things' refers to:
View answer and explanationA firm has accumulated 2,000 terabytes of data. This amount is equivalent to:
View answer and explanationData that are communicated periodically or with a lag are said to have:
View answer and explanationIn the context of machine learning, 'unsupervised learning' means:
View answer and explanationUsing ML to evaluate large volumes of research reports to detect subtle changes in sentiment is an example of:
View answer and explanationWhich fintech application is most likely to be used for executing large orders by dividing them across exchanges?
View answer and explanationCryptocurrencies typically reside on which type of network?
View answer and explanationA potential benefit of giving regulators permission to view a distributed ledger is:
View answer and explanationMining on a blockchain requires vast resources of computing power and electricity primarily to:
View answer and explanationRobo-advisory services are most likely to appeal to which type of investor?
View answer and explanationWhich data processing method involves assuring data quality by adjusting for bad or missing data?
View answer and explanationWhich of the following is considered a 'traditional' source of data?
View answer and explanationAn algorithm given inputs of source data with no assumptions about their probability distributions is characteristic of:
View answer and explanationWhich of the following describes the relationship between 'volume' and 'variety' in Big Data?
View answer and explanationWhich dataset is used to refine relationship models in machine learning?
View answer and explanationWhat is a significant drawback of Distributed Ledger Technology regarding trade cancellations?
View answer and explanationInvestors in Initial Coin Offerings (ICOs) should be aware that:
View answer and explanationWhich of the following is a risk analysis technique that can be enhanced by Big Data and Machine Learning?
View answer and explanationA key challenge in using Big Data is:
View answer and explanationWhich technology could potentially replace paper real estate deeds at government offices?
View answer and explanation