A. A company announces that it is changing the focus of its business operations from a relatively more cyclical and volatile industry to a relatively less cyclical and volatile industry. The share market reacts positively to this news, simultaneously increasing the companys share price and reducing its volatility. Both call and put options are traded on the companys shares.

1. All else being the same, what is the most likely overall effect of the above changes on call option prices? Provide a brief explanation. 2. All else being the same, what is the most likely overall effect of the above changes on put option prices? Provide a brief explanation.