jmh530

kurmanal Wrote:
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> Since the appraisals are done infrequently, you
> will have infrequent price changes. This means you
> will not "see" any movements between appraisal
> dates. Since you only see "the smoothed"
> increase/decrease in price, your computed standard
> deviation will be lower compared to highly liquid
> assets


exactly, but the CFA states that the TRUE variance (starndard deviation) will actually be the lower one having a downward bias.

read the statement above.