Chapter 03 · Section 3.1

Expiration Profile

You bought this option when volatility was at 25%.

If volatility increases by 10%, how will that change the call's expiration profile?

a) Shift to the left
• b) Shift to the right
  No. Remember that volatility is an influence on time value - not intrinsic value.
  c) Shift up
  d) Would not change the profile

(Click here for help)