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5 XIP Inc. just announces a major expansion into Internet of things. This announcement causes the price of its stock to decrease, because investors do
5 XIP Inc. just announces a major expansion into Internet of things. This announcement causes the price of its stock to decrease, because investors do not agree with management's decision to diversify, but also causes an increase in the volatility of the stock price. Which of the following correctly identifies the impact of these changes on the price of XIP options? A) Both changes cause the price of the put option to increase. B) Both changes cause the price of the call option to decrease. C) The greater uncertainty will cause the price of the call option to decrease. The lower price of the stock will cause the price of the call option to increase. D) The greater uncertainty will cause the price of the put option to increase. The lower price of the stock will cause the price of the put option to decrease
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