About this question
Medium · Probability & Statistics · Quant Trader interview question · stochastic-calculus, geometric-brownian-motion, volatility, ito's-lemma
Suppose a stock price, $S_t$ , follows a geometric Brownian motion with volatility $\sigma$ . You are tasked with analyzing a derivative whose payoff depends on the inverse of the stock price, $Y_t = 1/S_t$ . What is the volatility of $Y_t$ ?