Que-an 3 Suppose that you are presented with 2 models: {i} an EWMA model with parameter l=t1_91; and {ii} a GARCHH ,1} model with parameters r1= 0.09, = [190, and is = IJJJDDIJDB. a} What is the long-mo average volatility in both models? h} Assume that the most recent return um is estimated at 2% and the most recent volatility 0111 is estimated at 1%. Update the volatility estimate in both models. For all the remaining llama. con-Ider only the EAREHH .1} model: c} If the current volatility is 0.5% per day, what is your estimate of the volatility in 5, mo, and one days. d} What volatility should be used to price 5-, 100, and Editday options? e} Suppose that there is an event that increases the volatility from 0.5% per day to 1.5% per day. Estimate the effect on the volatility in 5, 'l. and one days. i} Estimate by hovlr much the event increases the volatilities used to price 5, 100, and EDD-day options