Respuesta :
Answer: if I’m correct the answer is $0.38
Step-by-step explanation:
The estimate of the standard deviation of the change in the stock price in one week is $2.77.
What is the standard deviation?
It is defined as the measure of data disbursement, It gives an idea about how much is the data spread out.
We have:
Stock price = $100
Volatility = 20% ⇒ 0.20
We know the standard deviation of change in the stock price is given by:
[tex]\rm = \frac{stock \ price \times implied \ volatility \times \sqrt{days \ to \ change} }{\sqrt{365} }[/tex]
[tex]\rm = \frac{100\times 0.20\times\sqrt{7} }{\sqrt{365} }[/tex] (1 week = 7 days)
= 5.2343×0.20×2.646
= 2.7699 ≈ $2.77
Thus, the estimate of the standard deviation of the change in the stock price in one week is $2.77.
Learn more about the standard deviation here:
brainly.com/question/12402189
