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

Predict and explain the effect on the options premium from the following: a. for a call option, a reduction in variance of the underlying security; b. for a put option, a reduction in variance of the underlying security; c. for a call option, a lower exercise price; d. for a put option, a lower exercise price.

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