Final answer:
A stock with high volatility but low beta is considered less risky because it is not strongly influenced by general market trends.
Step-by-step explanation:
In investing, volatility measures the degree of variation in the price of a stock. High volatility means the stock price can fluctuate greatly, while low volatility means the stock price is relatively stable. Beta, on the other hand, measures the stock's sensitivity to changes in the overall market. A low beta indicates that the stock is less affected by market movements.
Therefore, a stock with high volatility but low beta is considered less risky. While it may experience significant price fluctuations, it is not strongly influenced by general market trends. This means that even though the stock price may be highly volatile, its movements are not strongly correlated with the overall market, reducing the overall risk for investors.