All Else Equal, the Value of an Option Increases with an Increase

question 80

True/False

All else equal, the value of an option increases with an increase in the variance of returns in the underlying asset.

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Definitions:

Brokers' Commissions

Fees paid to brokers for their role in facilitating transactions, such as buying or selling securities, real estate, or insurance products.

Temporary Investments

Assets purchased with the intention to be sold in the short term for profit, such as stocks or bonds, not intended for long-term holding.

Held-to-maturity Securities

Financial instruments that an investor intends and is able to hold until maturity, carrying fixed or determinable payments and fixed maturity.

Noncurrent Assets

Assets expected to provide economic benefits beyond one year or the normal operating cycle of the business, including property, plant, and equipment, as well as intangible assets.