Question: 4. Given a functional form for the instantaneous forward implied volatility f(t) f(t) = 0.10 + 0.02*t a) What is the 5-year spot volatility? b)

4. Given a functional form for the instantaneous forward implied volatility f(t) f(t) = 0.10 + 0.02*t a) What is the 5-year spot volatility? b) What is the average volatility between years 5 and 10? c) What is the delta of a 5-year ATM option with no dividends and zero risk- free rate? (No dividends) d) What happens to delta if the stock goes up 10%

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