Historical versus implied volatility, Financial Management

There are two ways to estimate yield volatility - historical volatility and implied volatility. Thus far we have discussed how to calculate volatility by estimating historical yield volatility which is nothing but historical volatility. Implied volatility is calculated by estimating yield volatility based on observed price of interest rate options and caps.

Related Discussions:- Historical versus implied volatility

Dividend decision, Dividend Decision: The Dividend Decision is a decis...

Dividend Decision: The Dividend Decision is a decision taken by the directors of a company. It relates to the timing of any cash payments and amount made to the company's stoc

Strategic management, Develop and implement strategic plan using bounce fit...

Develop and implement strategic plan using bounce fitness as case study

What are the techniques of financial management, What are the techniques of...

What are the techniques of financial management There are two widely-discussed techniques: (i) Profit maximisation approach and (ii) Wealth maximisation approach.

Shareholders'' wealth maximization, Shareholders' wealth maximization S...

Shareholders' wealth maximization Shareholders' wealth maximization refers to maximization of the net present value of every decision made in the firm. Total present value is e

Define which is lower cost of debt or cost of equity, Which is lower for a ...

Which is lower for a given company: the cost of debt or the cost of equity? Explain: Ignore taxes in your answer . The cost of debt is all the time less as compared to the cost

Brief of volatility of interest rate, Historically, three types o...

Historically, three types of shapes have been observed for the yield curve. The relative change in the yield for each treasury maturity is known as a

Case lets, what type of financing is appropriate to each fim

what type of financing is appropriate to each fim

Going concern in financial management, Going Concern in Financial Managemen...

Going Concern in Financial Management Going concern means in which business activities will continue for a fairly long period of time unless and until the business has entered

Financial ratio analysis, 1. Calculate the compound average annual growth r...

1. Calculate the compound average annual growth rate in sales and profit after tax

Estimate the money in dollars have lost or gained, In January 2010 your fir...

In January 2010 your firm bought from an Italian firm goods payable in Euros worth EU2,000,000. Suppose that at that time the exchange rate of the Euros was 1EU=$1.25. Because th

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages