7.21 For the NYSE returns, say, rt, analyzed in Chapter 5, Example 5.4:

(a) Estimate the spectrum of the rt. Does the spectral estimate appear to support the hypothesis that the returns are white?

(b) Examine the possibility of spectral power near the zero frequency for a transformation of the returns, say, g(rt), using the spectral envelope with Example 7.19 as your guide. Compare the optimal transformation near or at the zero frequency with the usual transformation yt = r2 t .