Question 3 (2 points) On 23 September 2020 ASX200 closed at $4,546 and the daily volatility (0%) of the index was estimated as 1.25% per day at that time. The long-term volatility is 1.5% per day and parameters in a GARCH (1.1) model are 7 -0.01,2 -0.05 and 8 -0.94 What is the new volatility estimate if ASX200 closed at $4,636.2 on 24 September 2020? 2.2% 1.5% 1.2% Question 4 (2 points) Chris is a risk-taker and loves to invest in risky securities. The overall distribution of his returns is characterised by frequent small losses and a few large gains. This distribution is best described as having: Positive skew and a mean less than the median Negative skew and a mean less than the median Positive skew and a mean greater than the median Question 5 (2 points) Consumers have shifted from using CRT (Cathode Ray Tube -old fashioned) televisions to flat panel display (LCD, LEDs) televisions. As a result, companies those could not adopt the new technology fast enough still have inventories of CRT TV which can only be sold at losses. This risk is best described as: Risk that can be attributed to factors that impact an industry is best described as Systematic risk Market risk Unsystematic risk Question 3 (2 points) On 23 September 2020 ASX200 closed at $4,546 and the daily volatility (0%) of the index was estimated as 1.25% per day at that time. The long-term volatility is 1.5% per day and parameters in a GARCH (1.1) model are 7 -0.01,2 -0.05 and 8 -0.94 What is the new volatility estimate if ASX200 closed at $4,636.2 on 24 September 2020? 2.2% 1.5% 1.2% Question 4 (2 points) Chris is a risk-taker and loves to invest in risky securities. The overall distribution of his returns is characterised by frequent small losses and a few large gains. This distribution is best described as having: Positive skew and a mean less than the median Negative skew and a mean less than the median Positive skew and a mean greater than the median Question 5 (2 points) Consumers have shifted from using CRT (Cathode Ray Tube -old fashioned) televisions to flat panel display (LCD, LEDs) televisions. As a result, companies those could not adopt the new technology fast enough still have inventories of CRT TV which can only be sold at losses. This risk is best described as: Risk that can be attributed to factors that impact an industry is best described as Systematic risk Market risk Unsystematic risk