Volatility Clustering Is

question 10

Multiple Choice

Volatility clustering is

• A) The tendency for financial asset returns to have distributions that exhibit fat tails
• B) The tendency for financial asset return volatility to appear in bunches
• C) The tendency for volatility to rise more following a large price fall than following a price rise of the same magnitude
• D) All of the above

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Definitions:

Labeling Theory

A sociological theory suggesting that deviance and conformity result not so much from what people do, but from how others respond to those actions.

Social Interaction

Social interaction is the process by which individuals act and react in relation to others, shaping their behavior through mutual exchange and influence.

Impute Meanings

The act of assigning or attributing significance, interpretation, or value to something based on personal perceptions or cultural norms.

Labeling

The process of classifying or identifying individuals or groups based on specific characteristics, often leading to stereotyping or stigma.