A stock sells for $25. Over the next month you believe the stock will either increase to $30 or decrease to $18. If the volatility of the stock increases, would the option price decrease, increase or remain unchanged?

A) Decrease

B) Increase

C) Unchanged

Is there anything incorrect in the following definition of a Monte Carlo simulation?

A Monte Carlo simulation is the process of generating certain values for uncertain inputs in a model and computing the output variables of interest.

A) Yes

B) No