Suppose That a Researcher Wanted to Obtain an Estimate of Realised

question 11

Multiple Choice

Suppose that a researcher wanted to obtain an estimate of realised ("actual") volatility. Which one of the following is likely to be the most accurate measure of volatility of stock returns for a particular day?

• A) The price range (high minus low) on that day
• B) The squared return on that day
• C) The sum of the squares of hourly returns on that day
• D) The squared return on the previous day

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Definitions:

Legal Consideration

Something of value that is promised in exchange for performing an act or refraining from acting, forming a necessary element of a valid contract.

Open Offer

An invitation to all shareholders to purchase additional shares in the company, typically at a discount, and not limited to a specific number of shareholders.

Reasonable Intent

A legal standard assessing what a person of ordinary intelligence and prudence would intend under certain circumstances.

Blue Book Value

An estimated value of a vehicle, derived from a standard guide or reference, used largely in the used car market for valuation purposes.