Volatility measures the risk of a security. It is used in option pricing formula to gauge the fluctuations in the returns of the underlying assets. Volatility indicates the pricing behavior of the security and helps estimate the fluctuations that may happen in a short period of time.

If the prices of a security fluctuate rapidly in a short time span, it is termed to have high volatility. If the prices of a security fluctuate slowly in a longer time span, it is termed to have low volatility.

While the terms shareholder and stakeholder are often used interchangeably, there are certain differences between them. While a shareholder is a stakeholder of a company, the opposite is not true.

A shareholder owns a company’s shares and thus holds ownership in it. On the other hand, a stakeholder has an interest in the firm’s performance for a reason other than capital appreciation. Scope of stakeholders are higher than that of shareholders.