The SRY Model pg202 Flashcards
1
Q
what are the five stages of the significant relative yield model?
A
- philosophy of the strategy
- signal creation
- signal capture
- implementation issues
- Feedback/review process
2
Q
what does the SRY model do?
A
actively trade US equities and US bonds
3
Q
what is the philosophy of the SRY model?
A
the stocks and bonds are natural alternatives to one another.
4
Q
how can an investor benefit from know stocks and bonds are natural alternatives?
A
it suggests to move into stocks or bonds when either stock or bond values are unusually low, as it is expected that there will be a price reversal
5
Q
what is the general signal rule proposed to reallocated asset weights?
A
100% bonds if current yield is > 3yr mean yield + 2 stdv
100% equities current yield is
