Which of the following statements is true?
A)The Black Scholes model is the simplest to use and best used for complex situations.
B)The Binomial model does not handle options with dividend payments prior to expiration
Date.
C)The Black Scholes adequately handles the valuation of an American put.
D)The Binomal model is better for complex situations and is the simplest tool to use.
E)The Black Scholes model is simpler to use, but for complex situations, the binomial model
Is the necessary tool.

Question

Quizplus · Accepted Answer

The Black Scholes model is known for its simplicity and is widely used for options pricing. However, for more complex situations, especially those involving American options or options with dividends, the binomial model is preferred due to its flexibility and ability to handle a wider range of conditions.

Which of the Following Statements Is True