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1) Janice wants to buy stock A whose return shows a mean of 2% and a...

1) Janice wants to buy stock A whose return shows a mean of 2% and a standard deviation of 4% based

on 250 daily returns. At the .05 level of significance (or 95% confidence level), she would like to test if

the stock's daily return is equal to 5%. (a) write out the null and alternative hypotheses. (b) Compute

the test statistic. (c) Should she reject or fail to reject the null hypothesis?

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