- CFA Exams
- CFA Exam: Level I 2021
- Study Session 16. Derivatives
- Reading 49. Basics of Derivative Pricing and Valuation
- Subject 8. Factors that Affect the Value of an Option
CFA Practice Question
Higher volatility increases ______ option prices.
II. put
I. call
II. put
Correct Answer: I and II
Higher volatility increases possible upside values and increases possible downside values of the underlying.
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