The process of emphasizing more recent observations of data in calculating volatility is commonly known as:
A) ARCH
B) EWMA
C) GARCH
D) Realized quadratic variation

Question

Quizplus · Accepted Answer

The process of emphasizing more recent observations of data in calculating volatility is commonly known as Exponentially Weighted Moving Average (EWMA), which is represented by choice B. ARCH (Autoregressive Conditional Heteroskedasticity) and GARCH (Generalized Autoregressive Conditional Heteroskedasticity) are also methods for modeling volatility, but they involve more complex mathematical models. Realized quadratic variation is a method for calculating volatility using high-frequency data. However, it is not specifically related to emphasizing more recent observations of data.

The Process of Emphasizing More Recent Observations of Data in Calculating