An Increase in the Variance of the Return on the Underlying

question 349

True/False

An increase in the variance of the return on the underlying asset will increase the value of a call option.

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Definitions:

Personality Traits

Characteristics and behaviors that are consistent over time and across situations, defining an individual.

Impact

The strong effect or influence one thing has on another, which can be observed in various contexts such as social, environmental, or economic areas.

Excessive Optimism

An unrealistic expectation of positive outcomes, often disregarding potential risks or negative results.

Sexually Transmitted Infection

An infection transmitted through sexual contact, caused by bacteria, viruses, or parasites.