what is volatility in it
menus used to deffrent types of presentation
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Answer:
Explanation:
Volatility is the amount and frequency of price changes. It measures how wildly they swing and how often they move higher or lower. These can be prices of just about anything.
Volatility has been most exhaustively studied, measured, and described in the stock market. There, it is measured by historical prices changes, called realized volatility. It is also measured by expected future volatility implied by option prices.1
Causes of Price Volatility
Price volatility is caused by three of the factors that change prices. These three factors works by changing supply and demand.
Seasonality
The first is seasonality. For example, resort hotel room prices rise in the winter, when people want to get away from the snow. They drop in the summer, when vacationers are content to travel nearby. That is an example of volatility in demand, and prices, caused by regular seasonal changes.
Weather
Another factor affecting price volatility is the weather. For example, agricultural prices depend on the supply. That depends on the weather being favorable to bountiful crops. Extreme weather, such as hurricanes, can send gas prices soaring by destroying refineries and pipelines.2
Emotions
A third factor is emotions. When traders worry, they aggravate the volatility of whatever they are buying. That's why the prices of commodities are so turbulent.
The emotional status of traders is one reason why gas prices are often so high.
For example, in February 2012, the United States and Europe threatened sanctions against Iran for developing weapons-grade uranium. In retaliation, Iran threatened to close the Straits of Hormuz, potentially restricting oil supply. Even though the supply of oil did not change, traders bid up the price of oil to almost $110 in March.3 Gas prices rose to $3.87 a gallon.