A decrease in the risk of the underlying asset decreases the value of a put option.

Name: A decrease in the risk of the underlying asset decreases the value of a put option.
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Question

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A put option gives the holder the right to sell an asset at a specified price. If the risk or volatility of the underlying asset decreases, it's less likely that the asset will decrease to a point where exercising the option is profitable, thus decreasing the value of the put option.

A Decrease in the Risk of the Underlying Asset Decreases