Question: b) Answer the following questions i. Explain how implied volatility can be calculated. ii. Explain the meaning of volatility smile. iii. Explain what type of

b) Answer the following questions i. Explain how implied volatility can be calculated. ii. Explain the meaning of volatility smile. iii. Explain what type of volatility smile one should expect to see when the implied volatility has a heavier right left tail and a less heavy left tail than the lognormal distribution.

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