Grand Hotel just launched a new project in Asian market. Its share price moves up but share
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Question:
Grand Hotel just launched a new project in Asian market. Its share price moves up but share price volatility also increases. What’s the impact on a put option of Grand Hotel?
- The greater uncertainty will cause the price of the put option to decrease. The higher price of the stock will cause the price of the put option to increase.
- Both changes cause the price of the put option to decrease.
- The greater uncertainty will cause the price of the put option to increase. The higher price of the stock will cause the price of the put option to decrease
- The greater uncertainty has no direct effect on the price of the put option. The higher price of the stock will cause the price of the put option to decrease.
- Both changes cause the price of the put option to increase.
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