Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A)If you take the option price quoted in the market as an input and solve for the volatility,you will have an estimate of a stock's volatility known as the implied volatility.
• B)The Black-Scholes formula can be used to price American or European call options on non-dividend-paying stocks.
• C)We need to know the expected return on the stock to calculate the option price in the Black-Scholes Option Pricing Model.
• D)We can use the Black-Scholes formula to compute the price of a European put option on a non-dividend-paying stock by using the put-call parity formula.

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Definitions:

Difference

A distinguishing factor or quality that sets one thing apart from others, often utilized to compare and contrast entities or concepts.

Terminal Bud

A growth located at the tip of a stem or branch, where new leaves and flowers can develop.

Zone of Cell Division

An area in plant roots or shoots where cells are actively dividing, contributing to growth in length.

Shoot Tip

The apex of the shoot of a plant, containing the apical meristem responsible for the plant's growth in length.