Question: 5. Implied Volatility (Empirical) You will be given a series of information on the following real world call option prices. Calculate the implied volatility for

5. Implied Volatility (Empirical) You will be given a series of

5. Implied Volatility (Empirical) You will be given a series of information on the following real world call option prices. Calculate the implied volatility for each value. You can assume for all questions that the yield on a one year treasury bond is 0.73 percent (This is an annual return recall you need the continously compounded rate annualized for Black Scholes). You can utilize Goal Seek in excel to find the implied volatility value. (a) A call option on AAPL with strike price of $277.50 and premium of $28.73, it has 1 month until expiration. The spot price of AAPL is $288.19. The annual dividend yield is 1.06 %. (b) A call option on FB with strike price of $165.00 and premium of $26.83, it has 1 month until expiration. The spot price of FB is $185.52. The annual dividend yield is 0%. (C) A call option on BABA with strike price of 187.50 and premium of $25.60, it has 1 month until expiration. The spot price of BABA is $203.45. The annual dividend yield is 0%. 5. Implied Volatility (Empirical) You will be given a series of information on the following real world call option prices. Calculate the implied volatility for each value. You can assume for all questions that the yield on a one year treasury bond is 0.73 percent (This is an annual return recall you need the continously compounded rate annualized for Black Scholes). You can utilize Goal Seek in excel to find the implied volatility value. (a) A call option on AAPL with strike price of $277.50 and premium of $28.73, it has 1 month until expiration. The spot price of AAPL is $288.19. The annual dividend yield is 1.06 %. (b) A call option on FB with strike price of $165.00 and premium of $26.83, it has 1 month until expiration. The spot price of FB is $185.52. The annual dividend yield is 0%. (C) A call option on BABA with strike price of 187.50 and premium of $25.60, it has 1 month until expiration. The spot price of BABA is $203.45. The annual dividend yield is 0%

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