Question:

What does firm volatiltiy mean in financial terms?

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What does firm volatiltiy mean in financial terms?

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  1. It refers to the lack of stability of a financial system or product.  For example, interest rates or markets that fluctuate wildly, moving from one extreme to another, are deemed "volatile".


  2. A statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.

  3. if the company has low volatility, it means they are a safer investment (less risk in change)

    likewise, if the company has high volatility, they are risky and subject to changes in market prices

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