volatility

Definition

The relative rate at which the price of a security moves up and down. Volatility is found by calculating the annualized standard deviation of daily change in price. If the price of a stock moves up and down rapidly over short time periods, it has high volatility. If the price almost never changes, it has low volatility.

Use volatility in a sentence

After the advanced investor studied the volatility of a particular stock she decided that the potential risk was not worth the reward.

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