What Happens to the Value of Call and Put Options

question 27

Multiple Choice

What happens to the value of call and put options if the volatility of the price of underlying asset decreases?

• A) Put options will be worth more, call options will be worth less.
• B) Put options will be worth less, call options will be worth more.
• C) Both call and put options will be worth more.
• D) Both call and put options will be worth less.

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Definitions:

Gestalt Psychologists

Researchers in psychology who focus on holistic processing, emphasizing that the whole of anything is greater than its parts.

Primitive Features

Basic or simple characteristics or attributes that form the foundation of a more complex structure or system.

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Context Effects

The influence of environmental factors on one's perception, interpretation, or behavior in any given situation.