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What is Stochastic Volatility?

April 26, 2017stochastic volatility

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What is Stochastic Volatility?

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A stochastic volatility model is a way to evaluate an investment in quantitative finance. The stochastic volatility model is used in looking at derivative securities, which are based on an original security or stock. Financial experts use stochastic volatility models to learn more about what is likely to happen with a derivative because of the properties of the security that it is based on.