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A certain financial analyst defines the volatility of a stock during
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05 Apr 2022, 08:47
05 Apr 2022, 08:47
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Question Stats:
33% (01:49) correct
66% (02:00) wrong based on 3 sessions
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A certain financial analyst defines the “volatility” of a stock during a given week to be the result of the following procedure: find the absolute value of the difference in the stock's closing price for each pair of consecutive days in the week and then find the average (arithmetic mean) of these 4 values. What is the volatility of Stock X during the week shown in the table?
A. 0.50
B. 1.80
C. 2.00
D. 2.25
E. 2.50
GRE Prep Club Team Member
Joined: 20 Feb 2017
Posts: 2508
Given Kudos: 1053
GPA: 3.39
Re: A certain financial analyst defines the volatility of a stock during
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14 Apr 2022, 02:19
14 Apr 2022, 02:19
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Expert Reply
\(V = \frac{|19-21|+|22-19|+|24.5-22|+|23-24.5|}{4}\)
\(V = \frac{2+3+2.5+1.5}{4 }= \frac{9}{4} =2.25\)
Answer: D
\(V = \frac{2+3+2.5+1.5}{4 }= \frac{9}{4} =2.25\)
Answer: D
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Joined: 10 Apr 2015
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Re: A certain financial analyst defines the volatility of a stock during
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14 Apr 2022, 05:09
14 Apr 2022, 05:09
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Carcass wrote:
A certain financial analyst defines the “volatility” of a stock during a given week to be the result of the following procedure: find the absolute value of the difference in the stock's closing price for each pair of consecutive days in the week and then find the average (arithmetic mean) of these 4 values. What is the volatility of Stock X during the week shown in the table?
A. 0.50
B. 1.80
C. 2.00
D. 2.25
E. 2.50
Absolute difference from Monday to Tuesday = |19 - 21| = 2
Absolute difference from Tuesday to Wednesday = |22 - 19| = 3
Absolute difference from Wednesday to Thursday = |24.5 - 22| = 2.5
Absolute difference from Thursday to Friday = |23 - 24.5| = 1.5
Average of the absolute differences = (2 +3 + 2.5 + 1.5)/4 = 9/4 = 2.25
Answer: D
