Exercise 1. (20 points) For this exercise, the only extra packages allowed are ISLR2 and boot.

The dataset NYSE will be used throughout the exercise and is accessible through the ISLR2

package. We will only look at the variables DJ_return, log_volume and log_volatility in

this exercise, and we are interested in predicting DJ_return.

Using 10-fold cross-validation, choose the best input subset among all 4 possible input

subsets. Explain thoroughly how the procedure works and justify your reasoning.