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# Calculate the Implied Volatility Using Newton Raphson Algorithm.For this question, please what is wrong with this code?:def newtonRap(cp, price, s, k, t, rf): v = sqrt(2*pi/t)*price/s print "ini

Calculate the Implied Volatility Using Newton Raphson Algorithm.

For this question, please what is wrong with this code?:

def newtonRap(cp, price, s, k, t, rf): v = sqrt(2*pi/t)*price/s print "initial volatility: ",v for i in range(1, 100): d1 = (log(s/k)+(rf+0.5*pow(v,2))*t)/(v*sqrt(t)) d2 = d1 - v*sqrt(t) vega = s*norm.pdf(d1)*sqrt(t) price0 = cp*s*norm.cdf(cp*d1) - cp*k*exp(-rf*t)*norm.cdf(cp*d2) v = v - (price0 - price)/vega print "price, vega, volatility\n",(price0, vega, v) if abs(price0 - price) < 1e-25 : break return v