What Effect Does Volatility of the Underlying Asset Have on the Price

question 49

Essay

What effect does volatility of the underlying asset have on the price of the option?

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Definitions:

Bay Of Pigs

The site of an unsuccessful attempted invasion of Cuba by Cuban exiles, sponsored by the U.S. government, in April 1961.

Snowball Effect

A process that starts from an initial state of small significance and builds upon itself, becoming larger and potentially more significant.

Mob

A large, disorderly crowd of people, often associated with chaotic behavior or violence.

Dominant

Pertains to a trait that is expressed in the phenotype over a recessive trait when both are present in the genotype.