If the Bank of England announces that it will start to frequently intervene in order to reduce the fluctuations of the British pound, the premiums on call and put options will increase.

Question

Quizplus · Accepted Answer

The announcement of frequent intervention by the Bank of England would likely lead to a decrease in the volatility of the British pound, which could result in lower premiums on call and put options as there would be less uncertainty in the currency's movements.

If the Bank of England Announces That It Will Start