Question: Following with the same data as in Exercise 7, and using the EViews software, a. Calculate the sample autocorrelation functions, ACF and PACF of Rt

Following with the same data as in Exercise 7, and using the EViews software,
a. Calculate the sample autocorrelation functions, ACF and PACF of Rt for k = 1, 2, ..., 12.
b. Compute the following conditional means (assume linearity): E(Rt| Rt–1), E(Rt|,Rt–1, Rt–2), E(Rt|,Rt–1, Rt–2, Rt–4). Do you think that it will be possible to predict future returns based on linear combinations of past returns? Why or why not?

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