An Increase in the Volatility of the Underlying Asset,all Other

question 74

Multiple Choice

An increase in the volatility of the underlying asset,all other things held constant,will ________ the option premium.

• A) increase
• B) decrease
• C) not affect
• D) Not enough information is given.

---

Definitions:

Bankruptcy

A court-managed method enabling individuals or companies that are unable to pay off their debts to pursue reprieve for either a portion or the entirety of what they owe.

Bearer Form

Bond issued without record of the owner’s name; payment is made to whoever holds the bond.

Bond Issue

A bond issue refers to the process by which a borrower, like a corporation or government, issues bonds to raise funds from investors who lend them money for a defined period at a fixed interest rate.

Owner's Name

The identity of the legal individual or entity that holds ownership or title to an asset or property.