RiskMetrics Weights More Recent Observations More Highly Than Past Observations

question 52

True/False

RiskMetrics weights more recent observations more highly than past observations, which allows more recent news to be more heavily reflected in the calculation of the standard deviation.

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Definitions:

Ceteris Paribus

A Latin term used in economics to mean "all other things being equal," isolating one economic variable to analyze its effect.

Normative Economics

A branch of economics that expresses value judgments about economic fairness or what the economy ought to be like, focusing on policy prescriptions and outcomes.

Unintended Consequences

Outcomes that are not the ones foreseen or intended by a purposeful action, often contrasting with the action’s intended effects.

Endangered Species

Species of animals or plants that are at risk of extinction throughout all or a significant portion of their habitat.