单选题

If the implied volatility for options on a broad-based equity market index goes up, then it is most likely that:

A、 the broad-based equity market index has gone up in value.
B、 market interest rates have gone up.
C、 the general level of market uncertainty has gone up.

【正确答案】 C

【答案解析】

One benefit of derivatives markets is information discovery. Implied volatility reveals information about the risk of the underlying. Increases in implied volatility are an implication of increased market uncertainty.