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Please give me more details Problem 3. (Volatility smile and skew, 8) a. What is a volatility smile, and what is volatility skew? (4) b.

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Problem 3. (Volatility smile and skew, 8) a. What is a volatility smile, and what is volatility skew? (4) b. Explain the reverse skew for the Black-Scholes implied volatility of the SP500 index. (4)

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