Problem $16-06$

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3. Problem 16-06 eBook suppose the current value Of a stock is and the dividend Yield on flat at a continuously compounded rate Of 6.0%. Problem 16-06 a. If you estimate the volatility factor!fpr the index to be 15%, use the Black-Scholes modeltp ikdex calli o#tion With an exercise price of 665 and an expiration date in exactly three months. You may use Appendix D to answer the questiOr;, no puhdiin+rmete calculations. Round your answer to the nearest cent. b. If the actual market price of this option is $17.05, calculate the implied volatility coefficient. Do not round intermediate calculations. Round your answer to two decimal places. Grade it Now Save & Continue Continue without saving