in most of studies in financial market, risk management and pricing, the recherchers propose models and measurement techniques, and they do not construct assumptions and report variables like other quantitative studies.
Seminal papers and papers that build original theories do give underlying assumptions. Many papers follow these models and theories from literature and may not state assumptions explicitly but the assumptions of the original model cited apply. For example, papers using CAPM to build their models may not explicitly state assumptions of CAPM but they would still apply.
https://www.e-researchcommunity.org/
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Research methods and methodology in finance: exploring and interpreting data.modelling variation: probabilities, random variables, distributions. samples and populations. testing hypotheses.
Quantitative analysis (QA) in finance is an approach that emphasizes mathematical and statistical analysis to help determine the value of a financial asset, such as a stock or option.
In business and management, qualitative analysis uses subjective judgment to analyze a company's value or prospects based on non-quantifiable information, such as management expertise, industry cycles, strength of research and development, and labor relations.
Conclusion: The dominance of informed guesses, dear Chbili Sfia , seems to originate from the specific interests of private wealth management, where intuition seems to merge with logic more by the applied kitchen style.
Nikita Kedia it is the case where the model (MEDAF for example) plays the role of transporter or the carrier of the methodology and the hypotheses of reserach. that is what did you mean ?
- Nikita Kedia can you write me some articles, books or some sources that explain more what you said please? I would be very grateful.
Chuck A Arize thank you very much for sharing
Stephen I. Ternyik thank you very much for your helping, I am really grateful.
Quantitative studies are not always the best fit for such needs, as the financial market is dynamic and does not always follow a fixed pattern.
Yaniv Hozez yes, the financial market is dynamic and all assets have trajectory or path (dynamic in time) but we should explain the role of this model in a methodological way.
Chbili Sfia The question is whether quantitative research (which indeed involves assumptions constructing and variables reporting) is the (only) way to explain the role of this model in a methodological way, given the dynamic nature of the financial market, and granted the limitations of different procedures, each of which also has merits.
Yaniv Hozez Yes exactly, because these models always need to be extended, improved, calibrated, and even combined with other techniques to address the problems (which are dynamic) of financial markets.
yes you are totally right, we need to see other kind of research methodology
In financial market research, it is common to rely on propositions rather than assumptions and variables because propositions are more precise and testable. Propositions are statements that assert a relationship between two or more concepts or variables, while assumptions are untested beliefs or statements that are taken for granted.
In financial market research, propositions help to clarify the relationships between different variables and to develop a clear hypothesis that can be tested. Propositions are often based on existing theories or empirical evidence and provide a more structured approach to research.
On the other hand, assumptions are typically made in the absence of empirical evidence or when there is uncertainty about the true nature of the relationship between variables. Assumptions can be useful for generating ideas and developing initial hypotheses, but they are not as precise or testable as propositions.
In summary, relying on propositions in financial market research allows for a more precise and structured approach to testing hypotheses, while assumptions can be useful for generating ideas but may not provide the same level of clarity or precision.
We apply research methodology to prove our proposition while assumptions and variables are guiding force for data collection. Variables are source of data collection and assumption act as principle guide during collection of data.
In financial market research, both propositions and assumptions are important for developing a research methodology. Propositions are statements about the relationships between variables in a research study that are derived from theory or previous research. Assumptions, on the other hand, are beliefs or premises that underlie the research design and help to define the scope and boundaries of the study.
While assumptions can be useful in guiding research, they are typically more subjective than propositions and may be based on personal biases or incomplete information. Propositions, on the other hand, are grounded in empirical evidence and can be tested through statistical analysis.
Variables, which are the measurable characteristics or factors being studied in a research project, are essential components of both propositions and assumptions. Variables are used to operationalize theoretical concepts, and their relationships are typically expressed in the form of propositions.
In summary, while assumptions and variables are important components of research methodology in financial markets, propositions are generally preferred because they are grounded in empirical evidence and can be tested through statistical analysis.