Question: answer to 17 is 61.25, solve for the rest Consider following listing of call option on Tesla on Yahoo! Finance (Real quotes used). Current Price

answer to 17 is 61.25, solve for the rest  answer to 17 is 61.25, solve for the rest Consider following
listing of call option on Tesla on Yahoo! Finance (Real quotes used).

Consider following listing of call option on Tesla on Yahoo! Finance (Real quotes used). Current Price $580 Strike Price: $600 Risk-free Rate: 3.1% Time to Expiration 6 months (0.5 year) Call Premium $95.06 Dividend Yield 0% 17. What is the implied volatility of above listed call option? (hint: use the excel file I have uploaded on college. Instead of solving the algebraic equation of Black-Scholes, try to manipulate around volatility number to find the volatility that results in the given call price) 18. Above procedure of trying to guess the right number by changing the parameters of an equation is called "numerical approach" of finding an answer. Using this approach, what are the implied volatilities of Tesla using following call options prices? Strike Price Call Premium 550 $119.98 650 $78.78 $64.40 800 $42.63 900 $29.97 1000 $24.44 700 19. Plot the calculated implied volatilities on strike price - implied volatility plane and draw a graph by connecting plots. Make the horizontal axis represent "Strike Price and vertical axis "Implied Volatility". Use points calculated (for strike price 550, 600, 650, 700, 800, 900, 1000) Consider following listing of call option on Tesla on Yahoo! Finance (Real quotes used). Current Price $580 Strike Price: $600 Risk-free Rate: 3.1% Time to Expiration 6 months (0.5 year) Call Premium $95.06 Dividend Yield 0% 17. What is the implied volatility of above listed call option? (hint: use the excel file I have uploaded on college. Instead of solving the algebraic equation of Black-Scholes, try to manipulate around volatility number to find the volatility that results in the given call price) 18. Above procedure of trying to guess the right number by changing the parameters of an equation is called "numerical approach" of finding an answer. Using this approach, what are the implied volatilities of Tesla using following call options prices? Strike Price Call Premium 550 $119.98 650 $78.78 $64.40 800 $42.63 900 $29.97 1000 $24.44 700 19. Plot the calculated implied volatilities on strike price - implied volatility plane and draw a graph by connecting plots. Make the horizontal axis represent "Strike Price and vertical axis "Implied Volatility". Use points calculated (for strike price 550, 600, 650, 700, 800, 900, 1000)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!