8006 Exam Dumps | If the implied volatility for a call option is 30%, the implied volatility for the corresponding put

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Exam I: Finance Theory Financial Instruments Financial Markets - 2015 Edition
PRMIA.8006.v2021-04-25.q101
Question 98

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Question 98/101

If the implied volatility for a call option is 30%, the implied volatility for the corresponding put option is:

A. -70%

B. 30%

C. -30%

D. 70%

Correct Answer: B

Explanation
Implied volatilities are the same for calls and puts with similar exercise and strike prices. If not, it would offer an arbitrage opportunity. Therefore Choice 'b' is the correct answer.

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