The Black-Scholes OPM is dependent on which five parameters?
A) Stock price, exercise price, risk free rate, probability, and time to maturity.
B) Stock price, risk free rate, probability, time to maturity, and variance.
C) Stock price, risk free rate, probability, variance and exercise price.
D) Stock price, exercise price, risk free rate, variance and time to maturity.
E) Exercise price, probability, stock price, variance and time to maturity.

Question

Quizplus · Accepted Answer

The Black-Scholes Option Pricing Model (OPM) depends on five key parameters: the current stock price, the exercise (or strike) price of the option, the risk-free interest rate, the variance or volatility of the stock price, and the time to maturity of the option.

The Black-Scholes OPM Is Dependent on Which Five Parameters