During a 25-year period, that standard deviation of annual returns on a portfolio John is analyzing was 12 percent. He suspected that the portfolio's underlying variance of retum was greater than 1%. He would like to construct a hypothesis test to validate his judgment.

Question A. Formulate null and alternative hypothesis.

Question 8: Calculate the value of test statistic for conducting the test in part (a).

Question C: Identify the rejection point or points at the 1% significance level for the hypothesis in part (a). (Specify excel functions for the rejection point)

CHISQ DIST(x, degrees_ freedom, True/False)

CHISQ INV (probability, degrees _freedom)

NORM.S.DIST(z, True/False)

NORM.S.INV(probability)

F.DIST(x, degrees _freedomi, degrees_freedom2, True/False)

F.INV (probability, degrees_freedomI, degrees_freedom2)

T.DIST(x, degrees freedom, True/False)

T.INV (probability, degrees freedom)