Here are the percentage returns on two stocks. Month Digital Cheese Executive Fruit January 15 % 7 % February -3 1 March 5 4 April 7 13 May -4 2 June 3 5 July -2 -3 August -8 -2 a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answer to 1 decimal place.) 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 answer to 1 decimal place.)

Problem 7-12 Diversification Here are the percentage returns on two stocks. Month January February March April May June July August Digital Cheese 15% -3 5 7 -4 3 -2 -8 Executive Fruit 7% 1 4 13 2 5 a-1. Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answer to 1 decimal place.) Executive Fruit Variance Standard deviation % Digital Cheese 47.5 6.9 23.2 4.8 a-2. Which stock is the riskier if held on its own? O 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 answer to 1 decimal place.) Variance Standard deviation %