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Financial Risk Manager Part 1

Financial Risk Manager Part 1

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A junior risk analyst is in the process of evaluating the variability of a particular market factor. The analyst is considering whether to apply the Exponentially Weighted Moving Average (EWMA) model or the Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model, specifically the GARCH (1,1) variant. Which of the following statements is correct?

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