Question

If the risk of a stock increases, what is likely to happen to the price of call options on the stock? To the price of put options? Why? 

    If the risk of a stock increases, what is likely to happen to the price of call options on the stock? To the price of put options? Why?
Fundamentals of Corporate Finance
Fundamentals of Corporate Finance
Stephen A. Ross;… 11th Edition
Chapter 24, Problem 6 ↓

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This increased risk makes the stock less attractive to investors, which can lead to a decrease in demand for the stock. Now, let's consider call options. A call option gives the holder the right, but not the obligation, to buy the underlying stock at a  Show more…

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If the risk of a stock increases, what is likely to happen to the price of call options on the stock? To the price of put options? Why?
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