Question: Q2. a] How does an increase in volatility affect the option price? Why? in) What is the motivation for an investor to take a long

Q2. a] How does an increase in volatility affect
Q2. a] How does an increase in volatility affect the option price? Why? in) What is the motivation for an investor to take a long position in a credit default swap {CD5}? Explain the difference between settling the CDS with physical delivery and in cash

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