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Which of the Following Statements Is INCORRECT

Question 21

Multiple Choice

Which of the following statements is INCORRECT?


A) The Black-Scholes-Merton model can be used to price an American call option on a stock paying known dollar dividends.
B) The binomial model can be used to price an American call option in the presence of known dividends.
C) The Black-Scholes-Merton model can be used to price a European call option on a stock with a known dividend yield.
D) The Black-Scholes-Merton model can be used to price a European put option on a stock paying known dollar dividends.
E) None of these answers are correct.

Correct Answer:

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