the true volatility of this security isn't zero, its the standard deviation between the two outcomes, zero and 1200, or about 848. This is exactly why high vol

the true volatility of this security isn't zero, its the standard deviation between the two outcomes, zero and 1200, or about 848. This is exactly why high volatility is associated with higher risk - you can think of volatility as a spread between high and low values that this security can take on randomly. Just plug in those two outcomes, 0 and 1200 into excel stdev calculation. that's the volatility.