Answer: Identifying the investment goals and hypothesis

## Explanation **Correct Answer: A** **Reasoning:** - **Option A (Correct):** Identifying investment goals and hypothesis is a fundamental part of the strategy design step. This involves defining what the strategy aims to achieve and formulating testable hypotheses about expected performance. - **Option B (Incorrect):** Calculating maximum drawdown is typically part of the performance evaluation step, not the strategy design step. It's used to assess risk after the strategy has been implemented in the backtest. - **Option C (Incorrect):** Using rolling windows to replicate the live investing process is part of the backtesting implementation phase, not the initial strategy design phase. **Key Concept:** The strategy design step focuses on conceptualizing the investment approach, defining objectives, and establishing the theoretical framework before implementation and testing.

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