All Else Equal, If the Volatility (Variance)of the Underlying Stock

question 75

Multiple Choice

All else equal, if the volatility (variance) of the underlying stock increases, then the

• A)value of a put option increases and that of a call option decreases.
• B)value of a put option decreases and that of a call option increases.
• C)value of both a put option and a call option increase.
• D)value of both a put option and a call option decrease.

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Definitions:

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Engagement in cognitive processes infrequently, possibly leading to impulsive or unreflective decisions.

Food

Any nutritious substance that people or animals eat or drink or that plants absorb to maintain life and growth.

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An eating disorder characterized by an obsessive fear of gaining weight, leading to severe food restriction and weight loss.

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The lack of success or the inability to meet a desired or intended objective.