Question
- Question: Q16. The value of standard deviation for the rates of return of a stock is
- a. Squared variance of returns
- b. Squared mean of returns
- c. Usually higher than the variance
- d. The square root of the variance
- e. None of the above Q17. Which of the following factors increases the premium (price) of both a call option? a. Volatility b. The price of a put option c.Q16. The value of standard deviation for the rates of return of a stock isa. Squared variance of returnsb. Squared mean of returnsc. Usually higher than the varianced. The square root of the variancee. None of the aboveQ17. Which of the following factors increases the premium (price) of both a call option?a. Volatilityb. The price of a put optionc. The exercise price of a call optiond. GDPe. None of the aboveI need both please
Answer
Answer 16)
The value of standard deviation for the rates of return of a stock is The square root of the variance
Standard Deviation = Variance^(1/2)
Option d is correct.
Answer 17)
Volatility increase the value of both the put as well as the call option.
Option a is correct.
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