Question: Compare the following two call options, written on two different stocks: Call T S K Option price Dividend yield A 1 50 50 $ 8

Compare the following two call options, written on two different stocks:

Call T S K Option price Dividend yield

A 1 50 50 $ 8 0%

B 1 55 50 14 0%

Which stock must have the higher implied volatility? Explain briefly

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