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1. ### Significant Level

If I have a significant level of 2% and a list of historical return: 0.012, 0.024, 0.033, 0.045, 0.057 and 0.071 why do I need to take the 5th lowest return? How do I come up with the 5th lowest return from the 2% significant level? and how the logic works for other significant levels? I know...
2. ### Black-Scholes N(-d1) & N(-d2)

ok, I always seen in all the exercises that when calculation the price of a Put to convert the d1 into -d1 you need to do --> -d1 = 1 - d1 However, I don't know in the following exercise solution, where the -d1 & -d2 figures are coming from. Any help would be highly appreciated. Thanks...
3. ### Hypothesis Testing

I have seen this question from different sources. GARP Exams (2007 & 2009) and have 2 different answers for it: C & D Which is one correct? I would say C, but would like to have confirmation. Thanks Which of the following statements regarding hypothesis testing is incorrect? A. Type II error...

11. ### Probability

Can please anyone let me know the formula applied in the solution to come up with Prob( X < mean + 1.5*σ) = 0.9332 Prob( X < mean + 0.5*σ) = 0.6915 Prob( X < mean + 1.5*σ) - Prob( X < mean + 0.5*σ) = 0.9332 - 0.6915 Problem: Assume that a random variable follows a normal distribution with...