CFA Practice Question

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CFA Practice Question

The upside effect of volatility hurts ______.

I. calls
II. puts
A. II only
B. both I and II
C. neither
Explanation: Volatility does not hurt either puts or calls.

User Contributed Comments 7

User Comment
0is4eva "Upside effect helps calls, does not hurt puts."
"Downside effect helps puts, does not hurt calls."
Bibhu Good one.
surob Yeah, definitely a good one
jackwez options are priced on volatility.... more of it makes them more valuable (increases the chance you will be able to execute the contract)
rana1970 Volatility (weather upside or down side)never hurt call or put, rather volatility raises the values of call and put
rana1970 it is actually volatility due to which we give some value to call & put, instead of hurting
selimkipro thanks
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