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Below series is the plot of volatility in the stock price. From the graph it is evident that significant volatility clustering can be seen in

Below series is the plot of volatility in the stock price. From the graph it is evident that significant volatility clustering can be seen in tranches. To predict this kind of time series, what method of time series modelling is suitable and why? Justify your answer with proper reasoning. Answer Briefly

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6.00% 5.00% 4.00% 3.00% 2 2.00% 1.00% 0.00% 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67

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