Which one of the following inputs for the Black-Scholes model is NOT directly observable?
A) time to option maturity
B) risk-free interest rate
C) stock price
D) strike price
E) stock price volatility

Question

Quizplus · Accepted Answer

All of the inputs except for stock price volatility can be directly observed or measured. Stock price volatility must be estimated based on historical data or market analysis.

Which One of the Following Inputs for the Black-Scholes Model