Binary investment structure based on analyst ratings and financial data
Yan Xin · Journal of tianjin University of Technology · 2015
This paper aims at exploring whether the analyst ratings are valuable,how the investors can interpret the ratings and use information effectively to achieve abnormal returns by detecting the long-term performance of only-ratings strategy,onlyfinancial indicators strategy and binary investment structure based on both of ratings and financial indicators. Research shows that an analyst can really pick out the worthy companies with good fundamentals. Analyst ratings dig out a lot of information for investors,but the marginal value of them is not high. Finally,a reasonable financial explanation to the empirical results and the corresponding recommendations and conclusions are given.