Volatility cannot be directly observed for calculation purposes of the option pricing model. Therefore, it may be determined from
A)historic volatility.
B)forward-looking volatility.
C)implied volatility.
D)any of the above

Question

Quizplus · Accepted Answer

Volatility can be estimated using historic volatility, forward-looking volatility, or implied volatility, as all these methods provide different ways to assess the expected fluctuations in the price of the underlying asset.

Volatility Cannot Be Directly Observed for Calculation Purposes of the Option