9. A research analyst is examining a stock fo r possible inclusion in his client's p o rtfo lio . Over a 10-year period, th e sample mean and the sample standard deviation o f annual returns on the stock were 20% and 15%, respectively. The client wants to know if th e risk, as measured by the standard deviation, differs from 18%.

a. Construct a 95% confidence interval o f the population variance and then infer th e 95% confidence interval o f the p opulation standard deviation.

b. What assumption did you make in constructing the confidence interval?

c. Based on th e above confidence interval, does th e risk d iffe r from 18%?