
Ultimate access to all questions.
A financial analyst is concerned about the market risk of a stock. Based on the stock's return data of the most recent 12 months, it has been estimated that the historical volatility of the monthly returns is 4.5%. Which of the following is most likely correct?
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%.