Which of the following describes the potential risks associated with high volatility?

High volatility refers to significant price fluctuations in an asset over a short period. This characteristic of the market can create uncertainty as it becomes challenging to predict future price movements. When volatility is high, investments can experience rapid increases or decreases in value, which may lead to substantial gains for some investors but also the potential for significant losses for others. Such unpredictable behavior makes it difficult for investors to make informed decisions and manage their portfolios effectively.

While other options suggest conditions that would imply stability or low risk, they do not accurately reflect the reality of high volatility. For instance, high volatility is fundamentally at odds with the notion of certainty, minimal fluctuations, or low investment risk. Understanding the implications of high volatility is essential for investors who seek to navigate the risks associated with their investment strategies.