Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Here are the percentage returns on two stocks. Digital Cheese 14% Month January February March April May June July August -5 6 8 -6 4
Here are the percentage returns on two stocks. Digital Cheese 14% Month January February March April May June July August -5 6 8 -6 4 -4 -7 Executive Fruit 6% 1 4 14 2 6 -4 -3 a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 1 decimal places.) Digital Cheese Executive Fruit Variance Standard deviation % a-2. Which stock is the riskier if held on its own? Digital Cheese O Executive Fruit b. Now calculate the variance and standard deviation of the returns on a portfolio that invests an equal amount each month in the two stocks. (Do not round intermediate calculations. Round your answers to 1 decimal places.) Variance Standard deviation % c. Is the variance more or less than half way between the variance of the two individual stocks? O more than the 50%-50% O less than the 50%-50%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started