An increase in the volatility of returns of the underlying stock (and holding everything else constant): A. Decreases both call and put option values B. Increases both call and put option values C. Increases put option values but not call option values D. Decreases call option values but not put option values E. Increases call option values but not put option values
An increase in the volatility of returns of the underlying stock (and holding everything else constant): A. Decreases both call and put option values B. Increases both call and put option values C. Increases put option values but not call option values D. Decreases call option values but not put option values E. Increases call option values but not put option values
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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An increase in the volatility of returns of the underlying stock (and holding everything else constant):
A. Decreases both call and put option values
B. Increases both call and put option values
C. Increases put option values but not call option values
D. Decreases call option values but not put option values
E. Increases call option values but not put option values
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