5.4 Implied volatility . The stock price is S 100 The dividend yield is 1%. The risk-free interest rate is r = 5%. The current time is t = 0 and the expiration time is T = 1 The option strike is K 150. . Calculate fair value of a European call using the Black-Scholes formula, for the following volatilities. CBlack-Scholes 0.1 0.2 0.3 0.31 0.4 0.5 If you have done your work correctly, the answer for the call price increases as the volatility If you have done your work correctly, you should obtain c 2.0 fr = 0.31. . Suppose the market price of the option is kt2.0. Find a value of the volatility such that 1.99