Here are the returns on two stocks.

Digital Cheese Executive Fruit January +16 +9 February 3 +2 March +5 +4 April +7 +14 May 4 +3 June +3 +7 July 2 3 August 8 2

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?

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