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

question 22

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)between 0 and 30%.
• D)zero.
• E)Cannot say for sure

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