What Is Volatility?
The degree to which an asset's price fluctuates over time, typically measured by standard deviation; higher volatility indicates greater price swings and uncertainty. Series 66 candidates must assess volatility when matching investments to client risk tolerance and evaluating portfolio stability.
Volatility across 2 exams
Volatility appears on the following exams. Each defines it in the context candidates are tested on:
- Series 66
- The degree to which an asset's price fluctuates over time, typically measured by standard deviation; higher volatility indicates greater price swings and uncertainty. Series 66 candidates must assess volatility when matching investments to client risk tolerance and evaluating portfolio stability.
- Series 3
- A statistical measure of the magnitude of price fluctuations in a futures contract over time. Higher volatility increases the potential for larger price swings and greater margin requirements for maintaining positions.