Option implied volatility and theoretical volatility

If there was a question that included these topics, I don’t remember it so good job disguising.


Hmm. Me thinks you have studied a bit too much. Google correlated. What comes up is at the end. Note the example. Clearly they mean positively correlated, but do not use the word positively. It is understood. Google is giving us an example of normal discourse. I don’t need to conduct a survey to understand this (nor should you).

If you think most people don’t understand what the word correlate means, I’d give you odds that you are sorely mistaken. Do they understand that the correlation coefficient is the covariance divided by the standard deviations of the two things and that this represents the correlation in statistical analysis? Probably not. But, they do understand what it (generally) means for things to be correlated. It’s like a 6th grad vocabulary word would be my guess (s.d of estimate 1.7). And just like when they say 7, they mean +7, when they say correlated, they mean positively correlated.

cor·re·late verb past tense: correlated ; past participle: correlated have a mutual relationship or connection, in which one thing affects or depends on another. “the study found that success in the educational system correlates highly with class” synonyms: correspond to/with, match, parallel, agree with, tally with, tie in with, be consistent with, be compatible with, be consonant with, coordinate with, dovetail (with), relate to, conform to; More

Methinks that “methinks” is one word, not two.


Methinks that having a relationship or connection in which one quantity increases while the other decreases is consistent with this definition.

Bill loves correlation. A similar thread as this, where he got into a disagreement with another contributor caused the other guy to leave. Haven’t seen him since haha. However, it helped me truly understand what correlation means.

This question was not in the exam. I repeat, “not” in the exam. RickBankiel, you stop the accusation of “good job disguising”. How did you jump to your conclusion in the first place?? If you have nothing to contribute to meaningful discussion, stay quiet.

“Recent consumer trends for Europe and the United States have also been quite correlated. However, the United States recently has registered higher absolute measures of overall consumer health care spending. Whereas this consumer impact is likely to be stable in the United States over the next year, Europe is expected to continue to show increased growth. Advantage: Europe”

This is a quote from cfai vol3/pg118

perhaps each of you (op, magic,nerd,goog) could use similar examples :slightly_smiling_face:

This is constructive discussion, quoting example from CFA curriculum.

FIGHT!! hahaha joking, i thoroughly enjoy these back and forths :sunglasses: its like a nerd-off. Hope everyone is enjoying their first post-CFA exam weekend!

^ It’s boring as ****…:slight_smile:

+++++…1 :stuck_out_tongue:

Due respect to everyone here but this thread has turned really boring after initial few qualitative posts!

wait, even the CFAI leaves out the word positive when that’s what they mean???

unbelievable :slight_smile:

We better contact the CFAI and correct them.

Well, okay then lol. Even the Institute can be wrong. Because they are.