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

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

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

  3. Explain what the parameters are, describe how each parameter influences the result.

  4. Compare and contrast the advantages and limitations of the 2 models.

(600-900 words)

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