All else being equal, what impact would a rise in implied volatility have on the price...

Question

Question

All else being equal, what impact would a rise in implied volatility have on the price of an option?

business finance

Answer 1

Answer #1

All else being equal, the rise in implied volatility increases the price of an option. This is true for both call and put option.

Implied volatility is directly related to the price of the option (both call and put), all else being equal.

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Answer 2

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