Research suggests that the performance of the Black-Scholes option-pricing model has ________.
A) improved in recent years
B) remained about the same over time
C) been deficient for stocks with high dividend payouts
D) varied widely over the years since 1973

Question

Quizplus · Accepted Answer

Research has shown that the Black-Scholes option-pricing model is deficient in estimating options prices for stocks with high dividend payouts. There is no evidence to suggest that the performance of the model has improved in recent years or varied widely since 1973.

Research Suggests That the Performance of the Black-Scholes Option-Pricing Model