Interview Question: Where’s the Crystal Ball?

Sample Question #194 (finance)

List at least three ways to forecast volatility.

(Comment: volatility questions are very common at quant interviews)

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One Response to Interview Question: Where’s the Crystal Ball?

  1. Brett says:

    ANSWER
     
    1) Just use historical volatility
    2) Use a time series model like GARCH
    3) If liquid options exist, use implied volatility
    4) Just guess, based on some reasonable prior belief
     

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