Question

Suppose that observations on an asset price (in dollars) at the end of each of 15 consecutive weeks are as follows:

• 30.2, 32.0, 31.1, 30.1, 30.2, 30.3, 30.6, 33.0,
• 32.9, 33.0, 33.5, 33.5, 33.7, 33.5, 33.2

Estimate the asset price volatility. What is the standard error of your estimate?

Answer 1

Using Excel formula Standard Deviation can be calculated which gives volatility

	A
1	30.2
2	32
3	31.1
4	30.1
5	30.2
6	30.3
7	30.6
8	33
9	32.9
10	33
11	33.5
12	33.5
13	33.7
14	33.5
15	33.2
Volatility	1.45	Using Excel formula=STDEV(A1:A15)

Standard Error = Standard Deviation/n^0.5 = 1.45/15^0.5 = 0.38

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