An investor is trying to decide whether to invest in a given stock, but is worri

Question

An investor is trying to decide whether to invest in a given stock, but is worried about the volatility of the investment. If the investor is very certain that the volatility (as measured by the standard deviation) is greater than 15% then the investor will choose a different investment option. In a sample of the previous 101 days reveals that the standard deviation of the investment is 20% When testing the hypothesis (at the 1% level of significance) that the standard deviation is higher than 1 (or variance is greater than 225), what is the critical value?

Explanation / Answer

from above degree of freedom =n-1=101-1=100

for 100 df and 1% level of significance critical value =135.81

please revert if any further parts are required

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