Volatility:
A)is the degree of variability in security prices
B)if excessive, can contribute to market liquidity
C)arises primarily from bid-offer bounce
D)can encourage risk-averse traders
E)All of these.

Question

Quizplus · Accepted Answer

Volatility is the degree of variability in security prices. The other options are not accurate: B is incorrect because excessive volatility can contribute to market instability rather than liquidity, C is not a common term in finance, and D is incorrect because volatility can discourage risk-averse traders.