Question
Here are the percentage returns on two stocks. Month Digital Cheese Executive Fruit January 17% 7% February 3 1 March 5 5 April 7 13
Here are the percentage returns on two stocks.
Month | Digital Cheese | Executive Fruit |
---|---|---|
January | 17% | 7% |
February | 3 | 1 |
March | 5 | 5 |
April | 7 | 13 |
May | 4 | 2 |
June | 3 | 5 |
July | 2 | 4 |
August | 8 | 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.)
a-2. Which stock is the riskier if held on its own? 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.) c. Is the variance more or less than half way between the variance of the two individual stocks?
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