How to compute the implied volatility for xom

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The current stock price of Exxon (XOM) is $61.54. Using the Black-Scholes model, compute the value of a European put option on XOM with exercise price=$62 and time till expiration 6 months? The volatility of XOM stock is estimated to be 35 percent per year. No dividends will be paid before the option expires and the riskless rate is 2% per year. You can use the attached table for the cumulative normal.

Explain how to compute the implied volatility for XOM. You can use numbers to illustrate but there is no need to actually do the computation.

Reference no: EM133068095

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