Modeling Financial Market Volatility Redefines Risk Management for Investors
The article discusses how sudden changes in the economy lead to increased volatility in financial markets, which can be risky for investors. To understand and predict this volatility, researchers use conditional volatility models like ARCH-GARCH. These models help measure how much financial variables like exchange rates and stock market indices deviate from their expected values. By analyzing real data, researchers found that these models can effectively model and predict changes in financial market volatility over time.