Saturday, August 21, 2010

How to assess: implied price of oil in the price of Exxons stock?

People say the implied price (of the stock) is $80.00 oil. How do you assess this? Where do you figure this out?





How to assess: implied price of oil in the price of Exxons stock?
Plot the daily changes in the Exxon stock price against the daily changes in the oil price and calculate the correlation.

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