The volatility index (VIX)
A) is derived from stock valuations
B) combines stocks and call options
C) combines bonds and put options
D) is derived from put and call index options

Question

The volatility index (VIX)​
A) ​is derived from stock valuations
B) ​combines stocks and call options
C) ​combines bonds and put options
D) ​is derived from put and call index options

Quizplus · Accepted Answer

The volatility index (VIX) is derived from put and call index options. It measures the market's expectation of 30-day volatility based on S&P 500 index options. The VIX is often referred to as the "fear index" as it tends to increase during times of market turmoil and uncertainty.

The Volatility Index (VIX)​

The Volatility Index (VIX)