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You are evaluating the returns on two stocks: Alpha and Zephyr. Each stock's annual returns for the last four years are outlined below: Alpha: 12%,

You are evaluating the returns on two stocks: Alpha and Zephyr. Each stock's annual returns for the last four years are outlined below:

Alpha: 12%, 12%, (20%), 6%

Zephyr: (6%), 8%, 6%, (2%)

Required:

  1. Calculate the variance and standard deviation for each stock.
  2. Which stock has greater risk? Explain your answer.

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