Here are the percentage returns on two stocks. MonthDigital Cheese Executive FruitJanuary 14% 6%February –3 1 March 6 4 April 8 14 May –4 2 June 4 6 July –2 –4 August –8 –2 a-1. Calculate the monthly variance and standard deviation of each stock. (Donot round intermediate calculations. Round your answers to 1 decimal places.) a-2. Which stock is the riskier if held on its own? multiple choice 1Digital CheeseExecutive 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 2more than the 50%-50%less than the 50%

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Answered: Here are the percentage returns on two…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

Here are the percentage returns on two stocks.

Month	Digital Cheese		Executive Fruit
January		14	%	6	%
February		–3		1
March		6		4
April		8		14
May		–4		2
June		4		6
July		–2		–4
August		–8		–2

a-1. Calculate the monthly variance and standard deviation of each stock. (Donot 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