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Oct 11, 2018 · Finance Terms Everyone Should Know. 1. Amortization: Amortization is a method of spreading an intangible asset's cost over the course of its useful life. Intangible assets are non-physical assets that are essential to a company, such as a trademark, patent, copyright, or franchise agreement. 2.
- How to Price a Bond
What Is a Bond? A bond is a type of debt instrument that...
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- How to Price a Bond
Jun 18, 2024 · Definition. False financial statements are documents that do not accurately represent a company's financial position. They can be created through various fraudulent activities, including misrepresentation and earnings management. Detection and Prevention Role of Auditors. Auditors play a crucial role in detecting and preventing false financial ...
Dec 10, 2012 · Understanding Financial Leverage. by. Karen Firestone. December 10, 2012. “Leverage” is one of the more interesting and difficult concepts to fully grasp in all of finance, but it’s ...
- What Is Volatility?
- Understanding Volatility
- How to Calculate Volatility
- Types of Volatility
- Volatility and Options Pricing
- Other Measures of Volatility
- Tips For Managing Volatility
- Example of Volatility
- The Bottom Line
Volatility is a statistical measure of the dispersion of returns for a given security or market index. It is often measured from either the standard deviation or variance between those returns. In most cases, the higher the volatility, the riskier the security. In the securities markets, volatility is often associated with big price swings either u...
Volatility often refers to the amount of uncertainty or riskrelated to the size of changes in a security’s value. A higher volatility means that a security’s value can potentially be spread out over a larger range of values. This means that the price of the security can move dramatically over a short time period in either direction. A lower volatil...
Volatility is often calculated using variance and standard deviation (the standard deviation is the square root of the variance). Since volatility describes changes over a specific period of time, you simply take the standard deviation and multiply that by the square root of the number of periods in question: where: 1. σ = standard deviation of ret...
Implied Volatility
Implied volatility (IV), also known as projected volatility, is one of the most important metrics for options traders. As the name suggests, it allows them to make a determination of just how volatile the market will be going forward. This concept also gives traders a way to calculate probability. One important point to note is that it isn't considered science and therefore does not forecast how the market will move in the future. Unlike historical volatility, implied volatility comes from th...
Historical Volatility
Also referred to as statistical volatility, historical volatility (HV)gauges the fluctuations of underlying securities by measuring price changes over predetermined time periods. It is the less prevalent metric compared with implied volatility because it isn’t forward-looking. When there is a rise in historical volatility, a security’s price will also move more than normal. At this time, there is an expectation that something will or has changed. If the historical volatility is dropping, on t...
Volatility is a key variable in options pricing models, estimating the extent to which the return of the underlying assetwill fluctuate between now and the option’s expiration. Volatility, as expressed as a percentage coefficient within option-pricing formulas, arises from daily trading activities. How volatility is measured will affect the value o...
Beta
One measure of the relative volatility of a particular stock to the market is its beta (β). A beta approximates the overall volatility of a security’s returns against the returns of a relevant benchmark (usually, the S&P 500 is used). For example, a stock with a beta value of 1.1 has moved 110% for every 100% move in the benchmark, based on price level. Conversely, a stock with a beta of 0.9 has moved 90% for every 100% move in the underlying index.
The VIX
Market volatility can also be seen through the Volatility Index (VIX), a numeric measure of equity market volatility. The Chicago Board Options Exchange created the VIX as a measure to gauge the 30-day expected volatility of the U.S. stock market derived from real-time quote prices of S&P 500 call and put options.It is effectively a gauge of future bets that investors and traders are making on the direction of the markets or individual securities. A high reading on the VIX implies a risky mar...
Investorscan find periods of high volatility to be distressing, as prices can swing wildly or fall suddenly. Long-term investors are best advised to ignore periods of short-term volatility and stay the course. This is because over the long run, stock markets tend to rise. Meanwhile, emotions like fear and greed—which can become amplified in volatil...
Suppose that an investor is building a retirement portfolio. Since she is retiring within the next few years, she’s seeking stocks with low volatility and steady returns. She considers two companies: 1. ABC Corp. has a beta coefficient of 0.78, which makes it slightly less volatile than the S&P 500 index. 2. XYZ Inc. has a beta coefficient of 1.45,...
Volatility is how much and how quickly prices move over a given span of time. In the stock market, increased volatility is often a sign of fear and uncertainty among investors. This is why the VIX volatility index is sometimes called the “fear index.” At the same time, volatility can create opportunities for day traders to enter and exit positions....
n. 1. Capability of deceiving. With all deceivableness of unrighteousness. - 2 Thess. ii. 10. 2. Liability to be deceived or misled; as, the deceivableness of a child.
The meaning of DECEIVABLE is deceitful, deceptive. deceitful, deceptive; capable of being deceived… See the full definition. Games & Quizzes; Games & Quizzes ...
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DECEIVABLE definition: 1. easily deceived or tricked, and too willing to believe what other people say: 2. able to…. Learn more.
