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A financial analyst is concerned about the market risk pertaining to a specific stock. After examining the stock's performance over the previous year, the analyst has determined that the historical volatility of its monthly returns is 4.5%. Based on this information, which of the following statements is most likely accurate?
A
The implied volatility of the annual returns is 15.6%.
B
The implied volatility of the annual returns is 54.0%.
C
The volatility of the annual returns is 15.6%
D
The volatility of the annual returns is 54.0%.