PRMIA PRM Certification - Exam II: Mathematical Foundations of Risk Measurement 8002 Question # 7 Topic 1 Discussion

PRMIA PRM Certification - Exam II: Mathematical Foundations of Risk Measurement 8002 Question # 7 Topic 1 Discussion

8002 Exam Topic 1 Question 7 Discussion:
Question #: 7
Topic #: 1

When calculating the implied volatility from an option price we use the bisection method and know initially that the volatility is somewhere between 1% and 100%. How many iterations do we need in order to determine the implied volatility with accuracy of 0.1%?


A.

10


B.

100


C.

25


D.

5


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