Concept of volatility to define risk

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Wall Street uses the concept of volatility to define risk. A stock which has greater price volatility is considered to be more risky than a stock that has less price volatility.

With this in mind, locate a stock chart site on the internet. Big Charts is a good example. Bring up the S&P 500 index for the past year (using a daily price). On Big Charts the symbol is SPX. Compare the volatility of the S&P 500 index for the past four months to the volatility for the prior eight months.

Based upon your observations, is the stock market more or less risky now than a year ago? Why did you come to this conclusion?

Reference no: EM132433810

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