Select an option above to see an explanation here.

A) Both implied and historical volatilities are based on the price of the option, not the underlying asset.
B) Both implied and historical volatilities are measures of the option's price sensitivity to changes in the price of the underlying asset, not measures of risk or return.
C) Historical Volatility measures past price changes, while Implied Volatility is a market estimate of future volatility.
D) Both implied and historical volatilities are measures of the option's price sensitivity to changes in the price of the underlying asset, not the dividend yield or time to expiration.