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Hi,
Anybody have an easy way of calculating Std.Deviation to an Annual rate and back.
And how come it does not apply to the Interest Rates?
In Dec 09 exam, you are required to convert 6 month rate into an effective annual rate. I don’t understand why it is squared. When listning to lectures on OT, the person simply grosses up the figures ie: 6–> 12 would be (x12/6)
For Std Deviation, it seems to be a different game. From say 6 month -> 12 month, you have to (Std.Dev x Sq2).
Any help would be great! Thanks in advance
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if you refer to the formula of standard deviation, you will see that the formula actually has the square root. so consistently, you will have the square root as well for timing.
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