The Effect of Volatility on a Call/put's Price Is

question 7

Multiple Choice

The effect of volatility on a call/put's price is

• A) decreased price due to decreased possible losses
• B) nominal volatility will not noticeably effect a call/put's price
• C) increased price due to increased possible gains
• D) decreased price due to increased possible losses
• E) none of the above

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Definitions:

Mean

In statistics, it refers to the average value in a data set, calculated by summing all the numbers and dividing by the count of these numbers.

IQR

Short for Interquartile Range, it measures the middle 50% of data points in a dataset, offering a glimpse into data spread.

Range

The difference between the highest and lowest values in a set of data.

Median

The median is the value that lies at the center of a dataset when it is organized in ascending or descending order, splitting the set into two equal parts.