Economy, asked by harshithanaick5121, 11 months ago

If volatility is infinite then what is the value of options

Answers

Answered by anjalikumari231220
0

Explanation:

The stock price may fall a lot with high volatility, but you can only lose the price of the option if you bought the option. So the upside gets bigger but the downside is bounded. The value of a call option DOES NOT go to infinity as the volatility goes to infinity. It tends to the current value of the stock price S0.

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