You will find example here: http://www-stat.wharton.upenn.edu/~steele/Courses/434/434Context/Volatility/ConfusedVolatility.pdf http://www-stat.wharton.upenn.edu

You will find example here: http://www-stat.wharton.upenn.edu/~steele/Courses/434/434Context/Volatility/ConfusedVolatility.pdf http://www-stat.wharton.upenn.edu/~steele/Courses/434/434Con... There is relatively simple, yet illustrative problem described on the first page. The solution is on the second page. Try to solve it w/o looking the solution.