Which of the following is an assumption in the Black-Scholes valuation?
A) Short selling of securities is not permitted in the market.
B) Securities don?t make periodic payments such as for interest or dividends.
C) The logarithm of the return on the underlying equity is normally distributed.
D) Macroeconomic events have no effect on the prices of securities.
Correct Answer:
Verified
Q4: Explain the European and American options.
Q5: Which of the following is true of
Q6: Which of the following is true of
Q7: Under the binomial model,which of the following
Q8: Which of the following is the correct
Q10: _ of an option is the change
Q11: A call option on the equity of
Q12: Explain why an investor cannot capture the
Q13: The UK sterling risk-free rate is assumed
Q14: Explain the put-call parity for European options
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents