Question: Explain why the VIX formula in equation (24.29) overestimates implied volatility if options are American. The following three problems use the Merton jump formula. As

Explain why the VIX formula in equation (24.29) overestimates implied volatility if options are American.
The following three problems use the Merton jump formula. As a base case, assume S = $100, r = 8%, σ = 30%, T = 1, and δ = 0. Also assume that λ = 0.02, αJ =−0.20, and σJ = 0.30.

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