The Volatility of Woolworth's Share Price Is 30% and That

question 86

Multiple Choice

The volatility of Woolworth's share price is 30% and that of Reckon's shares is 30%. When I hold both shares in my portfolio with an equal amount in each, and the returns have a correlation of minus 1, the overall volatility of returns of the portfolio is

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