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Here are the percentage returns on two stocks

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Here are the percentage returns on two stocks.

Month                Digital Cheese           Executive Fruit

January 14%  6%February -5   1 March 6   4 April 8   14 May -6   2 June 4   6 July -4   -4 August -7   -3 

a-1) Calculate the monthly variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 1 decimal places.)

a-2) Which stock is the riskier if held on its own?

multiple choice 1

• Digital Cheese
• Executive Fruit

b) Now calculate the variance and standard deviation of the returns on a portfolio that invests an equal amount each month in the two stocks. (Do not round intermediate calculations. Round your answers to 1 decimal places.)

c) Is the variance more or less than half way between the variance of the two individual stocks?

multiple choice 2

• more than the 50%-50%
• less than the 50%-50%