Which of the following is true about shares?

The statement that share prices can fluctuate is true because the value of shares is influenced by a variety of factors, including market demand, company performance, economic conditions, and investor sentiment. This volatility is a core characteristic of equity investments, reflecting the underlying risk and potential for both gains and losses. As such, investors must be prepared for changes in share prices over time, which can occur on a daily basis depending on market movements.

Understanding this fluctuation is essential for investors as it highlights the importance of managing risk and having a long-term investment strategy. Unlike fixed-income investments, such as bonds, where returns are predetermined and consistent, shares can provide varying returns, contributing to their appeal but also their risk. This dynamic nature of share pricing is a fundamental aspect of equity markets.