Traders by using the historical volatility assume that the immediate future will be the same as the recent past, and the historical volatility will equal the forward-looking volatility.

Question

Quizplus · Accepted Answer

Traders often use historical volatility as an estimate for future volatility, assuming that past patterns will continue into the future. However, this is an assumption and not a certainty.

Traders by Using the Historical Volatility Assume That the Immediate