Computational Investing, Part I Week 1 note

1. Portfolio manager: the constant management fee, less  than 1%, not related to the performance.

    Hedge fund: two and twenty. 2% of the total amount plus 20% of the return

2. Common metrics for the hedge fund performance:

annual return, risk: standard deviation of return, volatility

3. Return|Sharpe|STDEV|Draw-down|Co

4. short sell: borrow the stock and sell them immediately to the market, buy them back and return them in the near future.

standard deviation of the return is the most common measure of risk.