The Volatility of Woolworth's Share Price Is 15% and That

question 56

Multiple Choice

The volatility of Woolworth's share price is 15% and that of Reckon's shares is 15%. When I hold both shares in my portfolio and the returns have zero correlation, the overall volatility of returns of the portfolio is:

• A)more than 15%.
• B)unchanged at 15%.
• C)less than 15%.
• D)Cannot say for sure.

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Definitions:

Supply Curve

The supply curve is a graphical representation showing the relationship between the price of a good or service and the quantity of that good or service that a seller is willing and able to supply.

Complements

Goods or services that are used together, where an increase in demand for one leads to an increase in demand for the other.

Quantity Supplied

The total number of goods or services that manufacturers are ready and can provide on the market at a particular price level.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price over a specific period.