Time-Varying Volatility

In finance allah shmoop what is volatility beta this thing

that's the symbol for volatility on the street we mean

the wall one not the mean one and it is

so commonly used that the in crowd members just say

beta when they're referring to volatility unless they're from tennessee

in which case they say you ve all y'all all

right so here's a siri's of stock prices stamped each

day that has lo ve all or low beta and

here's a siri's that has high beta dead man's pulse

versus rocky mountains Well what makes a stock volatile uncertainty

Think about it this way If everyone knew for sure

what a given stocks earnings would be for the next

ten years quarter by quarter and they also knew what

the overall markets average earnings would be in a few

other things like revenue growth and world conditions and we're

going to be war inflation there wouldn't be a lot

of guesswork The quote right unquote price today would be

thirty two dollars eighty three cents and the quote right

unquote rate of compounding would be eight percent in the

stock would slowly go up but this rate but in

non disney land riel life well nobody really knows much

of anything So stockcharts look like this and nerve endings

of wall street traders look like this Neither of them 00:01:19.771 --> [endTime] looked much like this chart So that's all you