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A liability is defined as a hindrance or disadvantage. In finance, it means specifically a debt. Volatility in finance refers to quick and unpredictable change in the value of objects. A stock is volatile if it's value is prone to sudden change - that's a volatile asset. A volatile liability then is a debt whose value is prone to sudden change.

A debt that could 'come due' in part or in full at any time is an example of a volatile liability. Ordinarily debts are valued in proportion to when they're going to come due, but it is risky to do anything with a credit that could need to be repaid at any time.

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Q: Give you an example of a volatile liability?
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