3. This problems uses the Garch data set in R’s Ecdat package.

(a) Using a solid curve, plot a kernel density estimate of the first differences of the variable dy, which is the U.S. dollar/Japanese yen exchange rate. Using a dashed curve, superimpose a normal density with the same mean and standard deviation as the sample. Do the two estimated densities look similar? Describe how they differ.

(b) Repeat part (a), but with the mean and standard deviation equal to the median and MAD. Do the two densities appear more or less similar compared to the two densities in part (a)?