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FINVIA

Glossary

Glossary

Volatility

Volatility refers to the range of fluctuation in the prices or returns of a financial instrument over a certain period of time. It is considered a measure of the risk or uncertainty of an investment. Higher volatility indicates greater price or return fluctuations, while lower volatility indicates a smaller range of fluctuation. Investors take volatility into account when assessing risk and constructing portfolios. Higher volatility can indicate higher risk and potentially higher return opportunities, while lower volatility is associated with less uncertainty and more stable performance.

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