Final answer:
The asset characteristic that defines their sensitivity to price fluctuation is known as volatility. High-volatility assets come with greater risk and potential for high returns, while low-volatility assets are considered safer with more stable prices.
Step-by-step explanation:
The asset characteristic that classifies assets based on sensitivity is called volatility. Volatility refers to the degree to which the price of an asset fluctuates over time. This measure is particularly important in the context of financial assets, such as stocks and bonds, where it is often used to gauge the risk associated with an investment. High-volatility assets are considered riskier, as their prices can change rapidly within a short period, potentially leading to high returns or significant losses. Conversely, low-volatility assets tend to have more stable prices and are generally viewed as safer investments.