Question

If the implied volatility for options on a broad-based equity market index goes up, then it is most likely that:

Answer 1

Increases in implied volatility are an implication of increased market uncertainty. If the implied volatility for options on a broad-based equity market index goes up, then it is most likely that: A. the broad-based equity market index has gone up in value. B. the general level of market uncertainty has gone up.

Answer 2

Answer:

Explanation:

Key Takeaways. Implied volatility is the market's forecast of the likely movement in a security's price and is often used to price option contracts. High implied volatility results in options with higher premiums and vice versa