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Update the volatility estimate

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Suppose that the price of an asset at close of trading yesterday was $300 and its volatility was estimated as 1.3% per day. The price at the close of trading today is $298. Update the volatility estimate using

-The EWMA model with λ = 0.94

-The GARCH(1,1) model with ω = 0.000002, α = 0.04, and β = 0.94.

Reference no: EM132752680

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