As the volatility of a stock's price increases, the value of call and put options on the stock decreases.

Question

Quizplus · Accepted Answer

The value of both call and put options tends to increase as the volatility of the underlying stock price increases. This is because higher volatility increases the likelihood that the stock price will move in the direction predicted by the option holder, leading to greater potential profit.

As the Volatility of a Stock's Price Increases, the Value