Which of the Following Statements About the Volatility Is Not

question 26

Multiple Choice

Which of the following statements about the volatility is not true?

• A)the implied volatility often differs across options with different exercise prices
• B)the implied volatility equals the historical volatility if the option is correctly priced
• C)the implied volatility is determined by trial and error
• D)the implied volatility is nearly linearly related to the option price
• E)none of the above

---

Definitions:

Passive Policy

A government or regulatory approach that involves minimal intervention in the economic affairs of individuals and businesses.

Unemployment

Unemployment refers to the situation where individuals who are capable of working and actively seeking work are unable to find a job.

Economy's Natural Ability

The inherent capacity of an economy to grow and adapt over time, based on resources, technology, and human capital.

Active Economic Policy

Government interventions aimed at influencing the economy through measures such as fiscal and monetary policies to achieve specific macroeconomic objectives.