We consider the put option value P() as a function of only the volatility with other parameters fixed. Find the following, and sketch the graph of P(). a) limP() b) lim P() 0+ c)p`() and extrene points d)p``() and infllection points

We consider the put option value P() as a function of only the volatility with other parameters fixed. Find the following, and sketch the graph of P(). a) limP() b) lim0+P() c) P() and extreme points d) P() and inflection points Problem 2 We want to compute the implied volatility of the put option in case where S0=3,E=1,r=0.05,Tt=1. Use Newton's method with initial point 0=^, and find 1 in three decimal places