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Here are the returns on two stocks

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Here are the returns on two stocks.

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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?

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