Volatility Cannot Be Directly Observed for Calculation Purposes of the Option

question 6

Multiple Choice

Volatility cannot be directly observed for calculation purposes of the option pricing model. Therefore, it may be determined from

• A)historic volatility.
• B)forward-looking volatility.
• C)implied volatility.
• D)any of the above

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Definitions:

Capitalism

An economic system based on private ownership of the means of production and their operation for profit, characterized by free markets, capital accumulation, and wage labor.

Primary Labor Market

Refers to sectors that offer stable, well-paid jobs, often with good working conditions and opportunities for advancement.

Social Barriers

Obstacles that exist within societies, which prevent individuals or groups from accessing resources, opportunities, or rights, contributing to inequality.

Conglomerates

Large corporations that operate in several industries at the same time.