Why Would an Exponentially Weighted Moving Average Be a More

question 7

Essay

Why would an exponentially weighted moving average be a more accurate means of calculating volatility than a simple sampling of historical data?

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Definitions:

Positively Correlated

A relationship between two variables in which they both move in the same direction, meaning that as one variable increases, the other also increases.

Manipulates Factor

In experimental design, the variable that is changed or controlled by the researcher to observe its effect on the dependent variable.

Research Design

The framework or plan for a study used as a guide in collecting and analyzing data.

Naturalistic Observation

A research method where subjects are observed in their natural environment without any intervention from the observer.