Question

Volatility risk is Group of answer choices the percentage change in the stock call-option price divided by the percentage change in the stock price. the sensitivity of the delta to the stock price. the risk incurred from unpredictable changes in volatility. the volatility level for the stock that the option price implies.

Answer 1

The correct answer is the third option: The risk incurred from unpredictable changes in volatility.

Step-by-step explanation:

To begin with, the concept known as "Volatility Risk", in the financial and business field, refers to the risk that the companies have to face in the cases where there is a change in the price of a stock due to the changes that tend to happen in volatility factors that have a huge influence in the stock itself. Therefore that this concept implicates the risk that the business has to deal with when working with variables that are risky because of the great influece of them in the price of the stock.