Homework answers / question archive / Here are the returns on two stocks

Here are the returns on two stocks

Finance

Share With

Here are the returns on two stocks.

Digital Executive

Cheese Fruit

January   +14   +7 

February   −3   +1 

March   +5   +4 

April   +7   +13 

May   −4   +2 

June   +3   +5 

July   −2   −3 

August   −8   −2

Calculate the variance and standard deviation of each stock.

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.

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