Question: Suppose the model for your asset is sigma subscript t superscript 2 equals.00001 plus.05 r subscript t minus 1 end subscript superscript 2 plus.9 sigma

Suppose the model for your asset is sigma subscript t superscript 2 equals.00001 plus.05 r subscript t minus 1 end subscript superscript 2 plus.9 sigma subscript t minus 1 end subscript superscript 2 and volatility today is 20.0% with zero return. What is your estimate of tomorrow's volatility in percentage? Round your answer to one decimal, for example, 20.2%.

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