You are estimating the probability of default for a given firm using the options model of default risk covered in class. In the context of this model, you are considering how a drop in the market value of the firm's assets impacts the distance to default (DD) of a firm (in the absence of other changes). The distance to default will decrease when the value of the firm's assets increases. This decrease will be larger when the asset volatility is higher. The distance to default will decrease when the value of the firm's assets increases. This decrease will be smaller when the asset volatility is higher. The distance to default will increase when the value of the firm's assets increases. This increase will be larger when the asset volatility is higher. The distance to default will increase when the value of the firm's assets increases. This increase will be smaller when the asset volatility is higher