3. (a) Define in words the volatility, the correlation and the market beta of a stock of your choice, with respect to a relevant market index;

(b) Describe the exponentially weighted moving average (EWMA) model and the historical model for estimating the volatility, the correlation and the market beta.

(c) Explain what the parameters are describe how each parameter influences the result;

(d) Compare and contrast the advantages and limitations of the two models; Illustrating your answers to (a) and (b) using equations, where you name each variable in the mathematical notation.

Illustrate your answers to (c) and (d) using screenshots of time series plots from Excel, with any data of your choice, where both the historical and EWMA volatilities are depicted as two lines on the same time series plot, and similarly for the correlations and the market beta.