The standard deviation of daily returns of a stock’s price is used as a measure of the risk of that stock. Suppose that in a sample of 101 days, the standard deviation of a particular stock is 1. 15%. a) In the past, the standard deviation of the daily returns of this stock has been 1.56%. Test the hypothesis at the 1% level of significance that the standard deviation has decreased from its previous level.
The standard deviation of daily returns of a stock’s price is used as a measure of the risk of that stock. Suppose that in a sample of 101 days, the standard deviation of a particular stock is 1. 15%. a) In the past, the standard deviation of the daily returns of this stock has been 1.56%. Test the hypothesis at the 1% level of significance that the standard deviation has decreased from its previous level.
MATLAB: An Introduction with Applications
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Author:Amos Gilat
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The standard deviation of daily returns of a stock’s price is used as a measure of the risk of that stock. Suppose that in a sample of 101 days, the standard deviation of a particular stock is 1. 15%.
a) In the past, the standard deviation of the daily returns of this stock has been 1.56%. Test the hypothesis at the 1% level of significance that the standard deviation has decreased from its previous level.
![1) The standard deviation of daily returns of a stock's price is used as a measure of the
risk of that stock. Suppose that in a sample of 101 days, the standard deviation of a
particular stock is 1.15%.
a) In the past, the standard deviation of the daily returns of this stock has been
1.56%. Test the hypothesis at the 1% level of significance that the standard
deviation has decreased from its previous level.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F68cc5e62-1f1e-447e-86e2-72966307f0c4%2Ff54afd6c-3ede-4883-b744-c7debf7a99d0%2Ffrlp61k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1) The standard deviation of daily returns of a stock's price is used as a measure of the
risk of that stock. Suppose that in a sample of 101 days, the standard deviation of a
particular stock is 1.15%.
a) In the past, the standard deviation of the daily returns of this stock has been
1.56%. Test the hypothesis at the 1% level of significance that the standard
deviation has decreased from its previous level.
Expert Solution
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Step 1
Consider that σ is the true population standard deviation of daily returns of a stock’s price.
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