The spot price of an index is 1,000 and the risk free rate is 4 The prices of three month European call and put options when the strike price is 950 are 78 and 26 Estimate (a) The dividend yield (b) The implied volatility ...

a From the formula at the end of Section 154 Th ...

The spot price of an index is 1,000 and the risk-free rate is 4%. The prices of

Question:

The spot price of an index is 1,000 and the risk-free rate is 4%. The prices of three month
European call and put options when the is 950 are 78 and 26. Estimate
(a) The yield
(b) The implied volatility.
Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...