Your instructor conducts equity volatility research using a generalized autoregressive conditional heteroscedasticity (GARCH) model. The first two equations in one of his research papers are: = Rity = 0 + BiyRm,ty + Eix.y, Ecky-N(0,hey) (Equation #1) hity = Yoy + Y1.Mie-1.y +Y2;&lt-ly (Equation #2) where Rity and Rm.ty are the daily stock returns on firm i at day 1 for year y and the value weighted US market return on day 1 for year y, respectively. Eity is the residual firm-specific component of (abnormal) returns, while hity represents conditional variance. Which FIN 3200 equation is the best substitute for the equation pair provided above? Var(R) = o = 2X=1 (p; x (E(r;) E(R))) = - Ct NPV) = PVinflows PVoutflows PVoutflows = 27-0 = = - i=0 (1+r) CAPM: R = Ryg + B (Rm - Rrf) r=g + = P1-P+C1 Po Po PVA, = , (1-(2) 1 T9 Your instructor conducts equity volatility research using a generalized autoregressive conditional heteroscedasticity (GARCH) model. The first two equations in one of his research papers are: = Rity = 0 + BiyRm,ty + Eix.y, Ecky-N(0,hey) (Equation #1) hity = Yoy + Y1.Mie-1.y +Y2;&lt-ly (Equation #2) where Rity and Rm.ty are the daily stock returns on firm i at day 1 for year y and the value weighted US market return on day 1 for year y, respectively. Eity is the residual firm-specific component of (abnormal) returns, while hity represents conditional variance. Which FIN 3200 equation is the best substitute for the equation pair provided above? Var(R) = o = 2X=1 (p; x (E(r;) E(R))) = - Ct NPV) = PVinflows PVoutflows PVoutflows = 27-0 = = - i=0 (1+r) CAPM: R = Ryg + B (Rm - Rrf) r=g + = P1-P+C1 Po Po PVA, = , (1-(2) 1 T9