Chapter 06 · Section 6.1

Increase in volatility

An increase in volatility will:

a) decrease the value of your put and increase your return.
b) have no effect on the value of your put.
• c) increase the value of your put and increase your return.
  Yes. An increase in volatility will make it more likely that the price of the underlying instrument will move. This increases the value of the option. Continue
  d) increase the value of your put and decrease your return.
  e) decrease the value of your put and decrease your return.