At the End of Thursday, the Volatility of Asset a Is

question 5

Short Answer

At the end of Thursday, the volatility of asset A is 2% per day and the volatility of asset B is 1% per day. Also, the covariance between the assets is 0.0001. During Friday, asset A produces a return of 3% and asset B produces a return of zero. An EWMA model with $\lambda = 0.9$ is used. Answer the following questions giving two decimal places.
i) What is an estimate of the volatility per day of asset A at the end of Friday? _ _ _ _ _ _ _
ii) What is an estimate of the volatility per day of asset B at the end of Friday? _ _ _ _ _ _
iii) What is an estimate of the correlation between the assets at the end of Friday? _ _ _ _ _ _ _

Analyze the impact of opportunity cost in the context of free goods and services.

Distinguish between different types of costs and their relevance to economic decision-making.

Apply the principle of marginal analysis to determine optimal levels of activity.

Understand the role of opportunity cost in comparing the value of alternate choices.

---

Definitions:

UML Class Diagram

A type of static structure diagram in the Unified Modeling Language that describes the structure of a system by showing the system's classes, attributes, operations, and the relationships among objects.

Private Access

An access modifier in object-oriented programming that restricts access to the members of a class from outside.

Container

A framework or an environment for storing or holding objects, often used in programming for structures such as arrays, lists, or files.

Array

A data structure consisting of a collection of elements, each identified by at least one array index or key.