Here are the returns on two stocks.

		Digital Cheese			Executive Fruit
January			+18			+8
February			4			+1
March			+6			+5
April			+8			+16
May			5			+2
June			+4			+6
July			3			4
August			9			3

a-1. Calculate the variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

a-2. Which stock is the riskier if held on its own?

• Digital Cheese

• Executive Fruit

b. Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

c. Is the standard deviation more or less than half way between the variance of the two individual stocks?

• Less

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