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

Here are the returns on two stocks.

$\backslash$table$[[,\backslash$table$[[$Digital$],[$Cheese$]],\backslash$table$[[$Executive$],[$Fruit$]]],[$January$,+17,+7],[$February$,-3,+2],[$March$,+5,+4],[$April$,+7,+15],[$May$,-4,+3],[$June$,+3,+5],[$July$,-2,-3],[$August$,-8,-2]]$

Required:

a$-1.$ Calculate the varlance and standard deviation of each stock.

a$-2.$ Which stock is riskler 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 varlance more or less than halfway between the varlance of the two Individual stocks?

Complete this question by entering your answers in the tabs below.

Req A$1$

Req A$2$

Req B

Req C

Calculate the variance and standard deviation of each stock.

Note: Do not round intermediate calculations. Round your answers to $2$ decimal places.

$\backslash$table$[[,\backslash$table$[[$Digital Cheese$],[$Retum$]],\backslash$table$[[$Executive Fruit$],[$Retum$]]],[$Variance$,\%,\%$