Calculate the implied volatility of the underlying stock

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Reference no: EM132036637

A stock currently trades at $50. It pays dividends at a rate of 2%, and the risk-free rate is also 2%. A 3-month call option with a strike price of $50 is trading at $2.

Calculate the implied volatility of the underlying stock.

Calculate the volatility of the call option.

(No Excel work. Please show step by step with formula)

Reference no: EM132036637

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