The Volatility of Home Depot Share Prices Is 30% and That

question 94

Multiple Choice

The volatility of Home Depot share prices is 30% and that of General Motors shares is 30%.When I hold both stocks in my portfolio with an equal amount in each,and the stocks returns have a correlation of minus 1,the overall volatility of returns of the portfolio is

• A)more than 30%.
• B)unchanged at 30%.
• C)zero.
• D)cannot say for sure

---

Definitions:

Friedrich von Schelling

A German philosopher known for his contributions to idealism in the late 18th and early 19th centuries.

God's Work of Art

A metaphorical expression suggesting that something or someone is created with extraordinary skill, beauty, or significance, often implying divine inspiration or craftsmanship.

Bildungsroman

A literary genre focusing on the psychological and moral growth of a character from youth to adulthood.

Learning

The process of acquiring knowledge, skills, values, beliefs, and habits through experience, study, or teaching.