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

question 98

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) zero
• D) equal to 60%

---

Definitions:

Welfare Capitalism

An economic system in which businesses provide social welfare services to their employees in addition to wages and benefits.

Worker Loyalty

The allegiance and commitment an employee has towards their employer or company, often associated with job satisfaction and organizational citizenship.

Supervisory Practices

Methods and strategies used by supervisors to manage and oversee their employees effectively.

Labor Reform

Changes and improvements made to labor laws and regulations aimed at enhancing worker rights and ensuring fair labor practices.