As the volatility of a stock's price increases, the value of call options [blank] and the value of put options [blank].

Question

Quizplus · Accepted Answer

As the volatility of a stock's price increases, the potential for the stock to move significantly in either direction increases. This makes both call and put options more valuable because there is a greater chance that the stock will move past the strike price in a favorable direction for the option holder.

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