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Chartered Financial Analyst Level 2

Chartered Financial Analyst Level 2

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An options trader gathers the following data for 1-year call options on three stocks:

StockImplied VolatilityTrader's Expected Volatility
Stock 125%20%
Stock 230%30%
Stock 322%28%

Based only on this information, which of the following actions is most appropriate for the trader?

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