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:

Marginal Product

The supplementary yield that comes from the utilization of an extra unit of a given input, with all other inputs remaining fixed.

Number of Workers

The total count of individuals currently employed or available for employment in a specific labor market.

Daily Output

The total quantity of goods or services produced by a firm or an economy in a single day.

Bouquets

Arrangements of flowers that are typically presented as gifts or used for decoration.