The Volatility of Home Depot Share Prices Is 50% and That

question 7

Multiple Choice

The volatility of Home Depot Share prices is 50% and that of General Motors shares is 50%. When I hold both stocks in my portfolio and the stocks returns have zero correlation, the overall volatility of returns of the portfolio is ________.

• A) more than 25%
• B) less than 50%
• C) more than 50%
• D) less than 25%

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Definitions:

Veggie Burger

A vegetarian burger made from a variety of ingredients such as beans, lentils, soy, or vegetables, designed to mimic the taste and texture of a meat burger.

Fast-Food Restaurants

Quick service eateries that specialize in serving food rapidly to customers, typically featuring limited menus and drive-thru service.

Large Market

A significant and extensive segment of the economy with a large number of consumers or businesses that demand goods and services.

Different Segments

Refers to the various distinct groups within a market, each with its own specific needs, preferences, and characteristics.