Instructions

These questions are based on the price fluctuations of four commodities - arhar, pepper, sugar and gold during February - July 1999 as described in the figures below:

Question 146

The price volatility of the commodity with the highest PV during the Febrauary-July period is approximately equal to:

Solution

Volatility for arhar is (2300-1500)/1900 = 42%
Volatility for pepper is (19500-17500)/18500 = 10.8%
Volatility for sugar is (1500-1410)/1450 = 6.2%
Volatility for gold is (4300-3800)/4150 = 12%

Hence, the highest volatility is around 40%


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