A call option is made at t0 and expires in 3 months strike, Ask an Expert

Finance

A call option is made at t=0 and expires in 3 months. Strike price is $90 but price today is $80. Risk free rate is 4%.

a) Draw a graph that shows the price as a function of volatility and explain the graph.

b) Determine implied volatility of the underlying stock if the call was sold for $3.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92091489

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