The below question was answered for me but I need further explanation.

A. Janice wants to buy stock A whose return shows a mean of 2% and a standard deviation of 4% based on 250 daily returns. At the .05 level of significance (or 95% confidence level), she would like to test if the stocks daily return is equal to 5%. (a) write out the null and alternative hypothesis. (b) Compute the test statistic. (c) Should she reject or fail to reject the null hypothesis?

When this question is solved, can you please explain the symbols you use for the formulas? Also, can you provide further explanation on the null and alternative hypothesis. How was this answerered? Also, why should she reject or fail to reject the null hypothesis?

Thank you for your help.