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What has happened to the implied volatility of Apple stock

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Reference no: EM132978580

Question - Suppose you own a call option on Apple stock with a strike price of $150. The option will expire one year from today. Suppose Apple will not pay dividends in the next year. The annual risk-free rate of interest is 3%. The current stock price of Apple is $170 per share. Suppose that the price at which the call option is selling in the market increases from $30.81 to $35 (holding everything else constant). What has happened to the implied volatility of Apple stock?

a. It has increased.

b. It has not changed.

c. There is insufficient information provided to draw any conclusions.

d. It has decreased.

Reference no: EM132978580

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