Price Uncertainty

Price uncertainty

Chance that the future price of an asset will change.

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Price Uncertainty

The chance or speculation that the price of an asset will change. This affects prices for stocks, commodities, and even bonds, whether directly or indirectly. Most of the time, price uncertainty refers to the possibility that a specific commodity is unstable. For example, a rice famine might produce uncertainty in the price of rice. However, it can also refer to uncertainty as to the real value of securities and their derivatives. According to Alan Greenspan, long-term, widespread price uncertainty is inimical to stable economic growth. See also: Price stability.