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Today the stock is trading at 100, which is also the expected value of future stock...

Today the stock is trading at 100, which is also the expected value of future stock price. If a 110 strike CALL is priced at $2, what is the implied MAD?

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Answer #1

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Implied mad = Strike price of call option / Difference in stock trading price.

= 2 / (110 - 100)

= 2 / 10

= 0.20

Implied mad = 0.20

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