What Is Volatility?

Volatility is a measure of the amount of risk associated with an investment. It measures how much the price of an asset can fluctuate over time, and it is usually expressed as a percentage. Volatility can be used to gauge how risky an investment may be, and investors often use volatility when deciding which investments to make.

The higher the volatility, the more unpredictable or volatile an asset’s price will be in relation to other assets. For example, stocks tend to have higher levels of volatility than bonds because their prices are more likely to change quickly due to market forces such as news events or economic data releases. On the other hand, bonds typically have lower levels of volatility since they are less affected by short-term changes in market conditions. Investors should consider both types of risks when making decisions about where to invest their money.

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