The greater the volatility of the underlying stock, the ____ the call option premium and the ____ the put option premium.

Name: The greater the volatility of the underlying stock, the ____ the call option premium and the ____ the put option premium.
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Question

The greater the volatility of the underlying stock, the ____ the call option premium and the ____ the put option premium. ​

Quizplus · Accepted Answer

Higher volatility increases the potential for movement in the stock price, which increases the value of both call and put options, as both types of options benefit from greater movement in the underlying stock's price.

The Greater the Volatility of the Underlying Stock, the ____