Question: For the period 19992004, using daily data, compute the following: a. An EWMA estimate, with b = 0.95, of IBMs volatility using all data. b.

For the period 1999–2004, using daily data, compute the following:
a. An EWMA estimate, with b = 0.95, of IBM’s volatility using all data.
b. An EWMA estimate, with b = 0.95, of IBM’s volatility, at each date using only the previous 60 days of data.
Plot both estimates. How different are they?

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