A crash rate is a measure of the probability of a financial asset or market experiencing a sudden and significant decline in value.
It is calculated by dividing the number of crashes (sudden and significant declines in value) by the total number of observations or trading periods.
This measure is often used to assess the risk of investing in a particular asset or market. A high crash rate indicates that there is a higher probability of the asset or market experiencing a crash, while a low crash rate indicates a lower probability of a crash occurring.
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