Which of the Following Best Defines Implied Volatility

question 55

Multiple Choice

Which of the following best defines implied volatility?

• A)An estimate of the price volatility of an option.
• B)The observed relationship of past and present option prices.
• C)An estimate of the price volatility of the underlying asset based on observed option prices.
• D)The observed relationship of past and present price volatility of the underlying asset.

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Definitions:

Sprain

A sprain is an injury to a ligament caused by overstretching or tearing, often affecting joints such as ankles, wrists, or knees, leading to pain, swelling, and limited mobility.

Arthritis

A form of joint disorder that involves inflammation of one or more joints, leading to pain and stiffness.

Streamlined Body

A body shape designed to reduce resistance to motion through fluid (water or air), making it easier for the organism or object to move efficiently.