I'm learing ARCH&GARCH model. I have four questions that I don't know the answers
1st: ARCH & GARCH are often used to evaluate equities. Does it mean that ARCH and GARCH are fitter for high volatility market?
2nd: Can I use these two models to estimate Interest Rate market?
3rd: If yes, the accuracy of forecasting depends on lag? In another word, the longer the lag, the better of forecasting?
Ex: if lag is 1 day, I can estimate tomorrow's price by today's price. If lag is 3 day, I can estimate price in 3 day from today's price.
4th: What's the right maximum likelihood function so that I can estimate all parameters in R language?
Thanks in advance