Consider digital (cash-or-nothing)call options.When volatility increases,the holders of out-of-the-money options generally ,and the holders of in-the-money options generally

Question

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When volatility increases, the probability of an out-of-the-money option becoming profitable increases, benefiting its holders. Conversely, in-the-money options already have intrinsic value, and increased volatility introduces more risk that the option could move out of the money, potentially causing losses for its holders.

Consider Digital (Cash-Or-Nothing)call Options