CFA Practice Question

There are 227 practice questions for this study session.

CFA Practice Question

Which is a measure of future volatility?

A. Historical volatility
B. Implied volatility
C. There is no such measure.
Correct Answer: B

Implied volatility is a measure of future volatility, whereas historical volatility is a measure of past volatility. Option prices reflect the beliefs of option market participants about the future volatility of the underlying.

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