Month Digital Cheese Executive Fruit January 15 % 7 % February –4 2 March 5 5 April 7 13 May –5 1 June 3 5 July –3 –3 August –9 –1 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? 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.)
Month Digital Cheese Executive Fruit January 15 % 7 % February –4 2 March 5 5 April 7 13 May –5 1 June 3 5 July –3 –3 August –9 –1 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? 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.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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| Month | Digital Cheese | Executive Fruit | |||||
| January | 15 | % | 7 | % | |||
| February | –4 | 2 | |||||
| March | 5 | 5 | |||||
| April | 7 | 13 | |||||
| May | –5 | 1 | |||||
| June | 3 | 5 | |||||
| July | –3 | –3 | |||||
| August | –9 | –1 | |||||
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?
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.)
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