Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Here are the percentage returns on two stocks. Digital Executive Month Cheese Fruit January 17% 9% February -3 1 March 5 5 April 6

image text in transcribed

Here are the percentage returns on two stocks. Digital Executive Month Cheese Fruit January 17% 9% February -3 1 March 5 5 April 6 14 May -4 2 June July August 3 -2 5 -8 -4 -2 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 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? more than the 50%-50% O less than the 50%-50%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials of Investments

Authors: Zvi Bodie, Alex Kane, Alan Marcus

9th edition

78034698, 978-0077502287, 77502280, 978-0078034695

More Books

Students also viewed these Finance questions