--%>

How is the implied volatility calculated

How is the implied volatility calculated?

E

Expert

Verified

Start along with the prices of traded vanilla options, generally the mid price among bid and offer, as well as all other parameters required in the Black–Scholes formula, as strikes, interest rates, expirations, dividends and except for volatilities.

   Related Questions in Financial Management

  • Q : Explain Modern Portfolio Explain Modern

    Explain Modern Portfolio.

  • Q : Abolish currency exposure by client

    Banks determine it essential to accommodate their client's needs to purchase or sell foreign exchange forward, in several instances for hedging purposes. How can the bank abolish the currency exposure it has formed for itself by accommodating a client's forw

  • Q : Mutual and stockholder-owned savings

    Compare and contrast mutual and stockholder-owned savings and loan associations.

  • Q : Question on unbiased predictor and

    The March 2000 Mexican peso futures contract holds a price of $0.11695. You believe the march spot price will be $0.08500. In which speculative location would you enter to try to earn profit from your beliefs? Illustrates your anticipated profits letting yo

  • Q : Arbitrage Given: price of Nokia shares

    Given: price of Nokia shares on the Helsinki stock exchange=12 euros, exchange rate=$1.3/euro, price of the ADR on the NYSE=$15 and each foreign share translates into 1 ADR. Show the actions you would take to make risk free arbitrage profits.

  • Q : Primary requirement for JIT inventory

    What are the primary requirements for a successful JIT inventory control system?

  • Q : Define market participants in the

    Define market participants in the foreign exchange market?The market participants which comprise the FX market can be categorized in five groups: international banks, non-bank dealers, bank customers, FX brokers, and central banks. Internation

  • Q : Conditions for deterministic stock

    Explain the conditions for assuming a deterministic stock price path for an equity option.

  • Q : Current income and common stockholders

    What is the meaning of statement: earnings available to common stock dividends paid from the current income and common stockholders statement affect the balance sheet item retained earnings.

  • Q : What are the competing effects in a

    What are the competing effects in a dispersion trade?