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

question 26

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:

Nondirectional

Pertains to hypotheses or tests that do not specify a direction of effect but instead test for any difference or association.

Type II Error

The probability of accepting a null hypothesis when it is false.

Multiple T Tests

Statistical tests used to compare the means of two groups on several different dependent variables.

Analysis Of Variance

A statistical method known as ANOVA, used to determine the existence of statistically significant differences between the means of three or more independent groups.