Answered step by step
Verified Expert Solution
Question
1 Approved Answer
How would I measure how much the price of a financial asset deviates from another financial asset that is backed by the same underlying (on
How would I measure how much the price of a financial asset deviates from another financial asset that is backed by the same underlying (on average)? For example, if I wanted to determine how the crude oil prices were different from oil futures prices using historical data, how would I do that? Would you recommend using a GARCH model to measure the volatility for both individually and then compare? Or should I first calculate the price differential between the two historically and then compare?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started