hello John
the st deviation in Black Scholes questions is normally given as variance %. however is this annual?
suppose if the question says that the monthly st deviation of shares is 25%. in this case what number do we use for our formula for Black Scholes?
please help
thanks
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St deviation in Black Scholes
8y ago#1It is annual.
If you were given the monthly variance, then the annual variance is 12 times the monthly variance (and therefore the annual std deviation is the monthly std deviation x the square root of 12).
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