An Increase in Uncertainty Results in a Higher Implied Standard

question 32

True/False

An increase in uncertainty results in a higher implied standard deviation for the stock, which means that the writer of an option requires a higher premium to compensate for the anticipated increase in the stock's volatility. ​

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Definitions:

Monthly

Relating to or occurring once a month; often used to describe payments, subscriptions, or reporting periods that happen once per month.

Advertising

The act of calling public attention to products, services, or needs through various forms of media, with the aim of influencing consumer behavior.

Profits

The financial gain obtained when the revenue from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Jeweler

A person or business that designs, makes, sells, and repairs jewelry and watches.