Question: Predict and explain the effect on the options premium from the following: for a call option, a reduction in variance of the underlying security; for

Predict and explain the effect on the options premium from the following:

  1. for a call option, a reduction in variance of the underlying security;
  2. for a put option, a reduction in variance of the underlying security;
  3. for a call option, a lower exercise price;
  4. for a put option, a lower exercise price.

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