Next, fit AR(1) and AR(2) models to the CRSP returns: 6 arima(crsp,order=c(1,0,0)) 7 arima(crsp,order=c(2,0,0)) (a) Would you prefer an AR(1) or an AR(2) model for this time series? Explain your...

Next, fit AR(1) and AR(2) models to the CRSP returns:

6 arima(crsp,order=c(1,0,0))

7 arima(crsp,order=c(2,0,0))

(a) Would you prefer an AR(1) or an AR(2) model for this time series? Explain your answer.

(b) Find a 95 % confidence interval for φ for the AR(1) model.