I have a question and I literally don't know where to begin. I am provided with a table of stock prices of Microsoft from August 13 to November 1, 2001. It includes the following headings: Date, Open, High, Low, Close, and Volume. I am supposed to estimate the volatility parameter, sigma, using the "standard estimator of volatility". I have that the formula is sigma=S times the square root of 252. I also have the formula for S. As I said, I don't know where to start or what I need to do to solve the problem. Thanks!
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
I have a question and I literally don't know where to begin.
I am provided with a table of stock prices of Microsoft from August 13 to November 1, 2001. It includes the following headings: Date, Open, High, Low, Close, and Volume.
I am supposed to estimate the volatility parameter, sigma, using the "standard estimator of volatility". I have that the formula is sigma=S times the square root of 252. I also have the formula for S. As I said, I don't know where to start or what I need to do to solve the problem. Thanks!
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