You observe a premium of $5.38 for a call option on Birdwell Enterprises common stock, which is currently selling for $38. The strike price on the call option is $35. The option has four months to maturity. The stock pays no dividends. The current risk-free interest rate is 4.50%. What is the implied volatility of the stock? Note: Round your answer to the nearest whole percent. Implied volatility %

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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You observe a premium of $5.38 for a call option on Birdwell Enterprises common stock, which is currently selling for $38. The strike
price on the call option is $35. The option has four months to maturity. The stock pays no dividends. The current risk-free interest rate
is 4.50%. What is the implied volatility of the stock?
Note: Round your answer to the nearest whole percent.
Implied volatility
%
Transcribed Image Text:You observe a premium of $5.38 for a call option on Birdwell Enterprises common stock, which is currently selling for $38. The strike price on the call option is $35. The option has four months to maturity. The stock pays no dividends. The current risk-free interest rate is 4.50%. What is the implied volatility of the stock? Note: Round your answer to the nearest whole percent. Implied volatility %
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