1. Suppose that the parameters in a GARCH (1,1) model are =0.04, =0.94, and =0.000002.
   1. Compute the long-run average volatility.
   2. If the current volatility is 1.4% per day, what is your estimate of the volatility in 10, 20, and 30 days?
   3. What volatility should be used to price 10-, 20-, and 30-day options?
   4. Suppose that there is an event that increases the volatility from 1.4% per day to 2.2% per day. Estimate the effect on the volatility in 10, 20, and 30 days.
   5. Estimate by how much the event in part (d) increases the volatilities used to price 10-, 20-, and 30-day options.