Question: Repeat the following numerical exercise three times. Generate n = 500 observations from the ARMA model given by xt = .9xt1 + wt .9wt1,

Repeat the following numerical exercise three times. Generate n = 500 observations from the ARMA model given by xt = .9xt−1 + wt − .9wt−1, with wt ∼ iid N(0, 1). Plot the simulated data, compute the sample ACF and PACF of the simulated data, and fit an ARMA(1, 1) model to the data. What happened and how do you explain the results?

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