why volatility matters in markets and do we have to matter risk ..if yes how do we matter risk? read 3-4 articles and provide your essay with 2 pages

SOLUTION:
Risk can be defined as the probability that the actual return of an investment or market will differ
from the expected return. It includes the probability of losing certain or whole of the original
investment. Risk is involved in every investment, but the degree or level of risk is different for
different investments.
The volatility is quite an important concept and it can be evaluated individually as well as on the
basis of economy as a whole. On overall economic basis, volatility affects the market conditions
like availability of funds, interest rate, prices of the home currency, prices of derivatives, foreign
exchange, returns from the domestic market, inflation etc. The volatility matters in the market
because the huge amount of funds is invested in the market. The return from a market or
investment is dependent on the volatility of the market. On individual basis, the volatility affects
the returns from the individual security. The relation between the risk and return is direct. Higher
the risk, higher is the return. If the asset is less risky than the expected return of an investor is not
high but if the risk involved is high then in such case the expected return of an investor is also
high. This relationship holds for both individuals as well as management of the companies....