Problem $11-19$ Diversification $($LO$3)$

Here are the returns on two stocks.

$\backslash$table$[[,\backslash$table$[[$Digital$],[$Cheese$]],\backslash$table$[[$Executive$],[$Fruit$]]],[$January$,+14,+7],[$February$,-3,+1],[$March$,+5,+4],[$April$,+7,+13],[$May$,-4,+2],[$June$,+3,+5],[$July$,-2,-3],[$August$,-8,-2]]$

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?