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I'm having a hard time understanding the meaning of the last paragraph in bold. Can someone explain it for me, in simple English, using simpler terms?

Noise arises from an external shock, which can be big or small. Big ones are terrorist attacks and war, and smaller but no less influential ones are related to financial conditions, such as a change in the availability of credit or margin requirements, affecting liquidity. In practice, many events that are called noise are in fact predictable, like a change in tax rates on securities trading vs. capital gains. But such a change is still noise in the sense that it comes from outside the security's main conditions and is not inherent in the security itself.

Academics are mixed on whether the shock has to be external, and include a variance in dividend from the forecast as a shock and noise, too, even though it's clearly internal to the fundamentals of the security.

closed as off-topic by Edwin Ashworth, AndyT, Nigel J, Dan Bron, jimm101 Feb 7 '18 at 12:09

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  • context will be needed to allow a proper answer. Perhaps you could rewrite the question, explaining from where the sentence comes. – J. Taylor Feb 5 '18 at 10:33
  • The Q. is off topic on ELU. Please seek suitable help. – Kris Feb 5 '18 at 10:43
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    Hello, Rho. Sorry, but as @MetaEd has said, Interpretation requests (such as criticism, discussion, and analysis of English literature, legal interpretations, and divining the author’s intent ... ) are out of scope and may be removed. – Edwin Ashworth Feb 5 '18 at 11:20
  • As a side note, unless the previous context makes some of these terms explicit with agreed upon standard references, this sounds like muddled ideas hiding behind jargon. – jimm101 Feb 7 '18 at 12:08
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There’s quite a bit of financial technical jargon in here, but I’ll have a go:

Academics are mixed on whether the shock has to be external.

Different academics have different opinions on whether a sudden change [in the price of a stock] has to come from a source outside the stock itself.

and include a variance in dividend from the forecast as a shock and noise, too,

and they also consider changes in actual dividend amounts (relative to expected dividend amounts) to be sources of sudden price changes,

even though it's clearly internal to the fundamentals of the security.

despite the fact that dividend payments obviously do not come from a source outside the stock itself.

  • Please read MetaEd's statement on interpretation requests being off-topic on ELU. – Edwin Ashworth Feb 5 '18 at 11:25
  • 1. Can you send me a link to the statement on interpretation requests? 2. If you look at the question’s edit history, it’s clear the OP is asking for help with the second paragraph, then later added the first paragraph as context in response to a comment. – MattBecker82 Feb 5 '18 at 11:25
  • No, I copied it from a 'comment' and it is unsearchable. I'm sure he will corroborate what he wrote, though. He is a site moderator. It fits with ELU policy, but is the best phrasing of the fact that such questions are out of scope that I've come across over the years. 'Primarily opinion based' and 'I'll have a go' seem closely related. – Edwin Ashworth Feb 5 '18 at 11:28
  • OK, in that case do you have a link to the policy? – MattBecker82 Feb 5 '18 at 11:34

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