Obtain the S\&P 500 Index daily closes for the period from January 1987 to December 2017 and compute the log returns. These are the data shown in Figure 1.30. Fit an MA(2) model to the returns. Comment on the fit and this method of analysis generally. Can ARMA models add meaningful insight into stock returns?

Figure 1.30:

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ACF -0.04 -0.02 0.00 0.02 0.04 Autocorrelations in Daily Returns of S&P 500 0 10 20 Lag 30 40 50