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Portfolio Management
Reading 39
Backtesting And Simulation
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LOS 39.a
A key assumption underlying backtesting is that:
A
markets are perfectly efficient, so no strategy can outperform.
B
the future will, at least to some degree, resemble the past, so a strategy that performs well historically should perform well in actual use.
C
historical data are free from bias, so results are always reliable.
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