Here are the returns on two stocks.

Digital Cheese Executive Fruit January +17 +6

February 4 +1

March +6 +5

April +8 +15

May 5 +2

June +4 +4

July 3 4

August 9 3

Required:

a-1.Calculate the variance and standard deviation of each stock. (Digital Cheese Return and Executive Fruit Return)

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. (Jan-Aug)

c.Is the variance more or less than halfway between the variance of the two individual stocks?