I have the latest version of Xcode (4.3.2) and have set Deployment Target to 4.0. But there is not iOS 4.0 simulator only 4.3 and above.

Is there an easy way to install iOS 4.0 Simulator in Xcode?
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Apple has stopped supporting devices running operating system previous to iOS 4.3 in their Xcode 4.3.2 SDK. So for that you might need to install the previous SDK of Xcode