7. In the previous question, you were told that the actual standard deviation was 40%. If, instead..

7. In the previous question, you were told that the actual standard deviation was 40%. If, instead of 40%, the measured standard deviation turns out to be 50%, how confident can you be in the initial assumption? State a null hypothesis and calculate the corresponding probability. 8. A hedge fund targets a mean annual return of 15% with a 10% standard deviation. Last year, the fund returned –5%. What is the probability of a result this bad or worse happening, given the target mean and standard deviation? Assume the distribution is symmetrical.

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