Task: Class Definition Understanding (ontology: Business_Finance/Financial_Industry_Business_Ontology)

Which of the following definitions best describes 'implied volatility'?

A. measure of volatility that is a forward-looking metric used to calculate probability
B. statistical measure of the rate of change in pricing for a given security or market index
C. measure of volatility that represents the expected fluctuations of an underlying stock or index over a specific time frame
D. measure of volatility that uses actual values for pricing, rates, and other measurements calculated over some prior period

Answer: measure of volatility that is a forward-looking metric used to calculate probability