Which of the following correctly identifies the impact of these changes on a put option of Tele-Tech Com?
A)Both changes cause the price of the put option to decrease.
B)Both changes cause the price of the put option to increase.
C)The greater uncertainty will cause the price of the put option to decrease.The higher price of the stock will cause the price of the put option to increase.
D)The greater uncertainty will cause the price of the put option to increase.The higher price of the stock will cause the price of the put option to decrease.
E)The greater uncertainty has no direct effect on the price of the put option.The higher price of the stock will cause the price of the put option to decrease.

Question

Quizplus · Accepted Answer

Greater uncertainty increases the price of a put option due to higher volatility, while a higher stock price decreases the price of a put option as it becomes less likely to be in-the-money.

Which of the Following Correctly Identifies the Impact of These