Rates of return are typically calculated as a percentage, which is the growth in value of an investment over a time period compared to its starting value. An investment does not need to be purchased or sold to make this calculation. The market price is used to measure a rate of return. . Volatility Volatility refers to swings in the value of an investment. Such swings in value may be caused by changes in the overall market or they may be due to specific changes effecting a particular investment.
Volatility is a form of risk.
In the long run, those investments with the highest volatility have the highest rate of return.