Here are the returns on two stocks. Digital Cheese Executive Fruit January +18 +7 February 2 +1 March +4 +4 April +6 +16 May 3 +2 June +3 +5 July 1 2 August 7 1 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?

• Req A1
• Req A2
• Req B
• Req C

Calculate the variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

	Digital Cheese Retum		Executive Fruit Return
Variance		%		%
Standard deviation

Which stock is riskier if held on its own?

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.)

Month	Portfolio Return
January
February
March
April
May
June
July
August

Is the variance more or less than halfway between the variance of the two individual stocks?