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The Use of Quantitative Methods in Investment Decisions: A Literature Review

The Use of Quantitative Methods in Investment Decisions: A Literature Review
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Author(s): Serkan Eti (Istanbul Medipol University, Turkey)
Copyright: 2021
Pages: 20
Source title: Research Anthology on Personal Finance and Improving Financial Literacy
Source Author(s)/Editor(s): Information Resources Management Association (USA)
DOI: 10.4018/978-1-7998-8049-3.ch001

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Abstract

Quantitative methods are mainly preferred in the literature. The main purpose of this chapter is to evaluate the usage of quantitative methods in the subject of the investment decision. Within this framework, the studies related to the investment decision in which quantitative methods are taken into consideration. As for the quantitative methods, probit, logit, decision tree algorithms, artificial neural networks methods, Monte Carlo simulation, and MARS approaches are taken into consideration. The findings show that MARS methodology provides a more accurate results in comparison with other techniques. In addition to this situation, it is also concluded that probit and logit methodologies were less preferred in comparison with decision tree algorithms, artificial neural networks methods, and Monte Carlo simulation analysis, especially in the last studies. Therefore, it is recommended that a new evaluation for investment analysis can be performed with MARS method because it is understood that this approach provides better results.

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