The basic Black-Scholes option valuation considers the effects of
A) the exercise price of the option.
B) tax expense.
C) cash dividend payments.
D) continuous buying and selling the option.

Question

Quizplus · Accepted Answer

The Black-Scholes option valuation model takes into account the exercise price of the option as well as other factors such as the stock price, time to expiration, volatility, and risk-free interest rate. The model does not consider tax expense, cash dividend payments, or continuous buying and selling of the option.

The Basic Black-Scholes Option Valuation Considers the Effects of