Reading 9.2: AQR Portfolio Group Solutions. (2020). Can Machines “Learn” Finance? Journal of Investment Management, Vol 18, No. 2, pp. 23-36.

Article  URL: https://www.aqr.com/Insights/Research/Journal-Article/Can-Machines-Learn-Finance

Learning Objectives

Demonstrate proficiency in the following areas:

LO 9.2.1 Machine learning and finance

For example:

A. Describe the difference between machine programming and machine learning.

B. Explain how tree models can be used for sorting stocks.

C. Describe the difference between “regression” and “regression with transformed X’s.”

D. Explain why finance is different when it comes to the applications of machine learning.

E. Explain why it is important to combine economic theory and machine learning.

Keywords

Decision trees (p. 6)                                 Connection weights (p. 7)

Neural networks (p. 7)                                 Interpretability (p. 11)