Research Assignment #1
Leah Smith
FIN4232
November 4th, 2021
An investor knows there are risks to every market and the money they invested. Learning
and diversifying skills in order to predict pattern regularity helps to lower those risks.
Understanding the stock market risks and how these risks can evolve in the future is so important
to investors. The plot shows several spikes in the DJIA volatility index. This usually occurs in
the period when the S&P 500 index is falling. The volatility index soared above 70% in the crisis
of 2007-2009. On the flip side, the volatility index is usually lower when the stock market is
rising (see period between 2003-2007). These relationships can swing back and forth over time—
