Two typos on page 115 in the following paragraph (This is in Study Notes: Part 1 Formula Sheets)
1. 5% (m-2) : Replace “m” with “n”
2. m=14 should have been m=4
” For example, assume the previous four daily returns for a stock are 6% (n-1), 5% (m-2), 4% (n-3) and 3% (n-4). What is a current volatility estimate, applying the moving average, given that our short trailing window is only four days (m=14)? If we square each return, the series is 0.0036, 0.0025, 0.0016 and 0.0009. If we sum this series of squared returns, we get 0.0086. Divide by 4 (since m=4) and we get 0.00215. That’s the moving average variance, such that the moving average volatility is about 4.64%. “
1. 5% (m-2) : Replace “m” with “n”
2. m=14 should have been m=4
” For example, assume the previous four daily returns for a stock are 6% (n-1), 5% (m-2), 4% (n-3) and 3% (n-4). What is a current volatility estimate, applying the moving average, given that our short trailing window is only four days (m=14)? If we square each return, the series is 0.0036, 0.0025, 0.0016 and 0.0009. If we sum this series of squared returns, we get 0.0086. Divide by 4 (since m=4) and we get 0.00215. That’s the moving average variance, such that the moving average volatility is about 4.64%. “
