Which one of the Black-Scholes formula parameters must be estimated?

Name: Which one of the Black-Scholes formula parameters must be estimated?
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Question

Quizplus · Accepted Answer

The variance of the return, also known as volatility, is the only parameter that cannot be directly observed or obtained from the market. The other parameters (stock price, interest rate, time to expiration, exercise price) can be observed or known. Therefore, the volatility must be estimated using historical data or market information.

Which One of the Black-Scholes Formula Parameters Must Be Estimated