Definition for : Volatility

Volatility of the Value (or the Rate of return) of a Financial security characterises the amplitude of the fluctuations of this Value (or Return). Mathematically, volatility is the Variance or the Standard deviation. In a Market economy, volatility measures the Risk: the Riskier a Financial security, the higher its volatility, and vice versa.

(See Chapter 18 Risk and return of the Vernimmen)

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