Stochastic volatility

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Updated: Aug 20, 2021

In finance, a theoretical assumption of time-varying Volatility driven by a stochastic process. The most common application of stochastic volatility models is in the pricing of financial derivatives.

Reference: Oxford Press Dictonary of Economics, 5th edt.



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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.