An empirical researcher reports the following for a particular stock: “In our data sample we find that the variance of (de-trended) ex post stock prices is 128 whereas the variance of (de-trended) actual stock prices is 110.” What may this tell us? Are there any potential problems with what it may tell us?

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter4: Equations Of Linear Functions
Section4.5: Correlation And Causation
Problem 23PFA
icon
Related questions
Question

An empirical researcher reports the following for a particular stock: “In our
data sample we find that the variance of (de-trended) ex post stock prices is
128 whereas the variance of (de-trended) actual stock prices is 110.” What
may this tell us? Are there any potential problems with what it may tell us?

Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Recommended textbooks for you
Glencoe Algebra 1, Student Edition, 9780079039897…
Glencoe Algebra 1, Student Edition, 9780079039897…
Algebra
ISBN:
9780079039897
Author:
Carter
Publisher:
McGraw Hill
Big Ideas Math A Bridge To Success Algebra 1: Stu…
Big Ideas Math A Bridge To Success Algebra 1: Stu…
Algebra
ISBN:
9781680331141
Author:
HOUGHTON MIFFLIN HARCOURT
Publisher:
Houghton Mifflin Harcourt
Holt Mcdougal Larson Pre-algebra: Student Edition…
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL