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

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%

View Answer

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.