Suppose that a certain stock has an annual volatility of


Suppose that a certain stock has an annual volatility of 20%.

Consider the following statement: If the returns are not correlated over time and I hold the sotock for two years, the volatility of my return will be approximately 2 x 20% = 40%.

Do you agree or disagree with this statements? In at most 35 words, explain why.

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Financial Management: Suppose that a certain stock has an annual volatility of
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