Here are the returns on two stocks. Digital Cheese Executive Fruit January +15 +8 February −4...

Here are the returns on two stocks.

	Digital Cheese		Executive Fruit
January		+15		+8
February		−4		+2
March		+6		+7
April		+8		+15
May		−5		+3
June		+4		+8
July		−3		−4
August		−9		−3

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?

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jeff jeffy answered 2 years ago

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