Which of the following is NOT commonly used as an estimate of a stock's volatility?
A)an estimate of its standard deviation of returns over a recent period
B)a time-series trend of historical standard deviations of returns over recent periods
C)the implied volatility derived from the stock option pricing model
D)an estimate of its option premium derived from the stock option pricing model

Question

Which of the following is NOT  commonly used as an estimate of a stock's volatility?
A)an estimate of its standard deviation of returns over a recent period
B)a time-series trend of historical standard deviations of returns over recent periods
C)the implied volatility derived from the stock option pricing model
D)an estimate of its option premium derived from the stock option pricing model

Quizplus · Accepted Answer

Option D, "an estimate of its option premium derived from the stock option pricing model," is not commonly used as an estimate of a stock's volatility. Instead, option premiums are influenced by volatility, not a direct measure of it. The other options (A, B, C) are direct methods to estimate or infer a stock's volatility.

Which of the Following Is NOT Commonly Used as an Estimate