As Uncertainty (Volatility) decreases with all else being equal, A. The price of the option will not change B. The price of the option will increase C. The price of the option will decrease D. The price of the option may increase or decrease depending on the underlying asset

As Uncertainty (Volatility) decreases with all else being equal, A. The price of the option will not change B. The price of the option will increase C. The price of the option will decrease D. The price of the option may increase or decrease depending on the underlying asset

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section16.4: The Entrepreneur

Problem 1ST

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Question

As Uncertainty (Volatility) decreases with all else being equal,

	A.	The price of the option will not change
	B.	The price of the option will increase
	C.	The price of the option will decrease
	D.	The price of the option may increase or decrease depending on the underlying asset

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