Answer to Question #23922 in Finance for Mayur

Question

The standard deviation of a stock is commonly used as one indicator for the risk associating the stock. To analyze the risk, or volatility, associated with investing in Chevron Corporation common stock, a sample of the monthly total percentage return for 12 months was taken. The returns for the 12 months of 2005 show that the average monthly return was 1.17% and standard deviation 7.58% in these 12 months. You have a portfolio with similar average return and a standard deviation 8%. Is the Chevron stock riskier than the portfolio? (Use p-value approach, at 99% confidence level.