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Here are the returns on two stocks. a. Calculate the variance and standard deviation of each stock. Which stock is riskier if held on its own? b. Now calculate the returns in each month of a portfolio that invests an

Here are the returns on two stocks.

a. Calculate the variance and standard deviation of each stock. 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?

 

Transcribed Image Text:

Digital Cheese Executive Frult January +15 +7 February -3 +1 March +5 +4 April +7 +13 May -4 +2 June +3 +5 July -2 -3 August -8 -2 Digital Cheese Executive Frult January +15 +7 February -3 +1 March +5 +4 April +7 +13 May -4 +2 June +3 +5 July -2 -3 August -8 -2

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Examiners utilize standard deviation as a boundary to quantify fluctuation conseque View the full answer


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Applied Equity Analysis and Portfolio Management Tools to Analyze and Manage Your Stock Portfolio

Applied Equity Analysis and Portfolio Management Tools to Analyze and Manage Your Stock Portfolio

ISBN: 978-1118630914

1st edition

Authors: Robert A.Weigand

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