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:

Henry Kissinger

A German-born American diplomat and political scientist who served as National Security Advisor and later Secretary of State under Presidents Nixon and Ford, known for his role in shaping U.S. foreign policy, particularly in relation to Vietnam and the Soviet Union.

Bombing of North Vietnam

Refers to the extensive aerial bombardment campaign conducted by the United States against North Vietnam during the Vietnam War.

President Nixon

Richard Nixon was the 37th President of the United States, serving from 1969 to 1974, and is best known for his involvement in the Watergate scandal.

La Raza Unida

A political party founded in the United States in the 1970s to promote Chicano (Mexican American) civil rights and empowerment.