Multiple Choice
New Tek announces a major expansion which causes the price of its stock to increase and also causes an increase in the volatility of the stock price.How will these two reactions affect the value of put options on this stock?
A) Both reactions will decrease the value.
B) Both reactions will increase the value.
C) Neither reaction will affect put option values.
D) The reactions will have offsetting effects on the value.
E) The change in volatility will have no effect while the increased stock price will decrease the value.
Correct Answer:
Verified
Correct Answer:
Verified
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