There is a positive relationship between the price of a put option and the volatility of the underlying common stock.

Name: There is a positive relationship between the price of a put option and the volatility of the underlying common stock.
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Question

Quizplus · Accepted Answer

Higher volatility increases the likelihood of the stock price moving significantly, which can increase the value of a put option as it raises the potential for the stock price to fall below the strike price.

There Is a Positive Relationship Between the Price of a Put