The implied volatility for an at-the-money call option suddenly jumps from 25 percent to 50 percent. This

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The implied volatility for an at-the-money call option suddenly jumps from 25 percent to 50 percent. This most likely means that:

a. The underlying stock has just paid a dividend.

b. The volatility jump is temporary.

c. The option has a short time to expiration.

d. An unforeseen event has increased the risk of the underlying stock.

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Fundamentals Of Investments Valuation And Management

ISBN: 9781266824012

10th Edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

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Question Posted: Dec 31, 2023 10:50 AM

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The implied volatility for an at-the-money call option suddenly jumps from 25 percent to 50 percent. This

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The answer is d An unforeseen event has increased the risk of the underlying stock Heres why Implied ...View the full answer

Fundamentals Of Investments Valuation And Management

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