Question

Digital Executive Cheese Fruit January February March April May June July August +7 +15 +4 +7 -4 -8 a-1. Calculate the variance and standard deviation of each stock. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Digital Cheese Retum Executive Fruit Return Variance Standard deviatio a-2. Which stock is the riskier if held on its own? Digital Cheese O Executive Fruit b. Now calculate the returns in each month of a portfolio that invests an equal amount each month in the two stocks. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places) Portfolio Return Month January February March April May June Ul August c. Is the standard deviation more or less than half way between the variance of the two individual stocks? O Less O More

Answer 1

Answer:

Book1 Excel HOME INSERT PAGE LAYOUTFORMULAS DATA REVIEW VIEW ACROBAT KPMG S Cut Wrap Tot EB Copy . 恒桓茁Merge & Center. $. % , 留1: conditional Format as Cell Formatting TableStyles Paste Insert Delete Format Sort & Find& Filter Select B 1 u . 田·ク· · Clear Format Painter Font Cells Editing Alignment Answer-(a.1) Answer- C Particulars Variance Standard Deviation Digital Cheese Executive Fruit 23.23 4.82 Standard Deviation is less than half way between the variance of two individual stock. Reason: refer calculation table 47.48 6.89 Answer- (a.2 Digital Cheese is more riskier as it has higher standard deviation 10 Answer-b Digital Cheese Executive Fruit Portfolio Month Janua Februa March Return 15 13 4.5 10 13 16 17 18 19 20 Ma June 2.5 Sheet1Sheet2 Sheet4 Sheet3 + 100% 06-48 PM ^钿脈40) 05/04/19 A O Type here to search

Formula View: Answer Sheet

Book1 Excel HOME INSERT PAGE LAYOUTFORMULAS DATA REVIEW VIEW ACROBAT KPMG o Trace PrecedentsShow Formulas 嚷Trace Dependents◆Error Checking. Define Name Use in Formula Calculate Now Calculate Sheet Watch nsert AutoSum Recently Financial Logical Text Date & Lookup & Math& More Name Function- Calculation 固Create from Selection Remove Arrows.⑤ Evaluate Formula -Time Reference Trig Functions Manager window Options . Used- Function Library Defined Names Formula Auditing A B Answer- (a.1 Digital Cheese 47.48 Answer- C Executive Fruit 23.23 4.82 Particulars Variance Standard Deviation6.89 Standard Deviation is less than half way between the variance of two individual stock Reason: refer calculation table Answer- (a.2 Digital Cheese is more riskier as it has higher standard deviation 10 Answer-b Executive Fruit Digital Cheese Month Janua Februa March Portfolio Return 12 13 D14 0.5)+(E14*0.5 D15 0.5)+(E15*0.5 D16 0.5)+(E16 0.5 D17 0.5)+E1T"0.5 D18 0.5)+(E18 0.5 D19 0.5)+(E19*0.5 D20 0.5)+(E20*0.5 16 17 18 19 20 Ma June 2 2 Sheet1Sheet2 Sheet4 Sheet3 + 100% 06-48 PM ^钿脈40) 05/04/19 A O Type here to search

Calculation:

Book1 Excel HOME INSERT PAGE LAYOUTFORMULAS DATA REVIEW VIEW ACROBAT KPMG S Cut Ee Copy AutoSumA Wrap Tot Calibri Paste Sort & Find& Filter Select Insert Delete Format B 1 u·B-2. 쇠 Merge & Center. $. % ,留1: conditional Format as Cell Clear Format Painter Formatting TableStyles Editing Font Cells Alignment K19 Digital Cheese Fruit DigitaExecutive Executive Combined Cheese Fruit Month Janua Februar March April dx 2 13.14 5.64 0.39 92.64 1.89 2.64 40.64 28.89 185.88 23.23 4.82 7 13.375 1-4.625 43.375 13 5.375 25.625 5 1.375 3 3.625 2-9.625 3.625 2.375 0.625 9.625 1.375 1625 6.375 5.375 Total 48.48 178.89 10.98 2139 11.39 28.89 31.64 1.89 13.14 92.64 198.13379.88 47.48 6.89 3 51.73 7.73 2.23 23.11 51.73 June 2 -8 Total Avg Return 3.375 Variance (ơ2 Std Deviation(o) 24.77 4.98 1.625 14 Sheet Sheet2 Sheet3 囲回匹 + 100% 06:31 PM 05/04/19 O Type here to search

Formula View: Calculation sheet

Book1 Excel HOME INSERT PAGE LAYOUTFORMULAS DATA REVIEW VIEW ACROBAT KPMG S Cut Ee Copy AutoSumA Wrap Tot Calibri Paste Sort & Find& Filter Select Insert Delete Format B 1 u·B-2. 쇠 Merge & Center. $. % ,留1: conditional Format as Cell Clear Format Painter Formatting TableStyles Editing Font Cells Alignment K19 Digital Cheese Fruit DigitaExecutive Executive Combined Cheese Fruit Month Janua Februar March April dx 2 13.14 5.64 0.39 92.64 1.89 2.64 40.64 28.89 185.88 23.23 4.82 7 13.375 1-4.625 43.375 13 5.375 25.625 5 1.375 3 3.625 2-9.625 3.625 2.375 0.625 9.625 1.375 1625 6.375 5.375 Total 48.48 178.89 10.98 2139 11.39 28.89 31.64 1.89 13.14 92.64 198.13379.88 47.48 6.89 3 51.73 7.73 2.23 23.11 51.73 June 2 -8 Total Avg Return 3.375 Variance (ơ2 Std Deviation(o) 24.77 4.98 1.625 14 Sheet Sheet2 Sheet3 囲回匹 + 100% 06:31 PM 05/04/19 O Type here to search

Note: "If you have any Query/Suggestions, feel free to ask me in the comment box."