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Question 13

Volatility is often discussed when people talk about risk, but volatility specifically refers to how much the price of an asset moves up and down, usually measured statistically as standard deviation. Higher volatility means larger swings in short-term returns; that can equal higher potential gains but also deeper losses. Risk tolerance and time horizon determine how much volatility an investor can reasonably accept. This question asks for the best plain-English definition of volatility.

Which best describes volatility in investing?

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