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0 pointsdojomouse11y ago0 comments

No, volatility can increase as well as decrease returns.

0 comments

Downward volatility hurts you more than upward volatility helps you (on average). That's where the -sigma^2/2 term comes from.

Yes, so you could write

r + (amount that upward volatility helps) - (amount that downward volatility hurts) > g

j / k navigate · click thread line to collapse

0 pointsdojomouse11y ago0 comments

No, volatility can increase as well as decrease returns.

Downward volatility hurts you more than upward volatility helps you (on average). That's where the -sigma^2/2 term comes from.

Yes, so you could write

r + (amount that upward volatility helps) - (amount that downward volatility hurts) > g

j / k navigate · click thread line to collapse