The value of a put option is negatively related to the:
I.stock price;
II.volatility of the underlying stock price;
III.exercise price
A)I only
B)II only
C)I and II only
D)III only

Question

Quizplus · Accepted Answer

The value of a put option increases as the stock price decreases (I is correct), but it also increases with the volatility of the underlying stock price (II is incorrect). The value of a put option is positively related to the exercise price (III is incorrect), meaning as the exercise price increases, the value of the put option increases.

The Value of a Put Option Is Negatively Related to The