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

question 51

Multiple Choice

The volatility of Home Depot share prices is 30% and that of General Motors shares is 15%. When I hold both stocks in my portfolio and the stocks returns have a correlation of 1, the overall volatility of returns of the portfolio is ________.

• A) more than 15%
• B) less than 30%
• C) unchanged at 30%
• D) equal to 15%

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