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:

Ca

Calcium, a chemical element with the symbol Ca and atomic number 20, an alkaline earth metal essential for living organisms, particularly in cell physiology.

Lewis Dot Structure

A diagrammatic representation of the valence electrons in an atom, ion or molecule, using dots around the symbol of an element.

Potassium

A soft, silvery-white metallic element, highly reactive and essential for biological organisms, symbolized as K.

Se

Selenium, a nonmetal element with properties that are intermediate between those of metals and nonmetals, used in various industrial applications.