The Following Information Is Given About Options on the Stock $\sigma$

question 53

Multiple Choice

The following information is given about options on the stock of a certain company.
S₀ = 23 X = 20
r_c = 0.09 T = 0.5
$\sigma$ ² = 0.15
No dividends are expected.
Use this information to answer questions 1 through 8.
-If the actual call price is 3.79,the implied standard deviation is

• A)0.25
• B)greater than 0.25
• C)less than 0.25
• D)infinite
• E)none of the above

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Definitions:

Ribosomal RNA

RNA molecules that form the core of the ribosome, playing a crucial role in the synthesis of proteins.

Transfer RNA

A type of RNA molecule that helps decode a messenger RNA (mRNA) sequence into a protein during protein synthesis.

Messenger RNA

A type of RNA that conveys genetic information from DNA to the ribosome, where it specifies the amino acid sequence of the protein products of gene expression.

Primary mRNA Transcript

The initial, unmodified RNA transcript produced by transcription from DNA.