A good stock forecasting model must
A) have spurious but statistically significant relationships.
B) be tested and found accurate on out of sample data.
C) include money supply data.
D) have many economic variables.

Question

Quizplus · Accepted Answer

A good stock forecasting model must be able to accurately predict future stock prices on data that was not used in training the model. This is only possible if the model is tested and found accurate on out of sample data. Including irrelevant variables or too many variables can actually decrease the accuracy of the model. Money supply data may be useful in certain economic models, but it is not a requirement for a good stock forecasting model.

A Good Stock Forecasting Model Must