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?