Back test

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Back Test

To use past data to predict future events. Researchers use back testing to find relationships between apparently unrelated events and determine if one causes the other. One may conduct back testing to inform one's investment decisions or strategy, though the practice is not always accurate because a great number of inputs cause economic events.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Back test.

A back test simulates the investment return that an investment strategy would have produced over a specific period.

For example, someone who wanted to evaluate a strategy of buying after stock splits might test the effect of having purchased 500 additional shares in the large-cap stocks in a hypothetical portfolio each time one of the stocks split during the period from 1957 to the present.

Back testing is sometimes used to support a current investment strategy by demonstrating that it would have enjoyed strong past performance. Critics point out that the testing period that's chosen has a significant impact on the results and that past performance doesn't guarantee future returns.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
BPO employees performed poorly compared to their controls in auditory verbal learning test, stroop test and visual N back tests. However no statistically significant difference was observed in verbal N back tests.
The 1 back and the 2 back versions of the N back test [10] were used.
In the 1 back test the subject responds whenever a consonant was repeated consecutively.
Visual Working Memory was tested using N back test with 1 back and 2 back versions.
In the 1 back test the subject was told to respond when the location of the dots was consecutively repeated and in the 2 back test was told to respond whenever the location of the dot was repeated after one intervening card.
Any back test has to be taken with a grain of salt, because you never see the nine back tests that didn't work before they got to the tenth.
``Back to back Tests are really hard but it's good to have had a few days off before the Twenty-20 and it will be a fantastic day.
Next year's international summer, which begins only two weeks after the winter commitments end, is a gruelling affair,including three sets of back- to back Tests.