Question
Here are the returns on two stocks. Digital Cheese Executive Fruit January +14 +7 February 4 +2 March +6 +5 April +8 +12 May 5
Here are the returns on two stocks.
Digital Cheese Executive Fruit
January +14 +7
February 4 +2
March +6 +5
April +8 +12
May 5 +3
June +4 +6
July 3 3
August 9 3
Required:
a-1.Calculate the variance and standard deviation of each stock.
a-2.Which stock is riskier if held on its own?
b.Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks.
c.Is the variance more or less than halfway between the variance of the two individual stocks?
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International Financial Reporting Standards An Introduction
Authors: Belverd E. Needles, Marian Powers
3rd Edition
1133187943, 978-1133187943
