Which of the Following Is NOT True

question 1

Multiple Choice

Which of the following is NOT true?

• A) Black's model can be used to value an American-style option on futures
• B) Black's model can be used to value a European-style option on futures
• C) Black's model can be used to value a European-style option on spot
• D) Black's model is widely used by practitioners

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Definitions:

Annual Interest Rate

The percentage of principal charged by the lender for the use of its money, calculated on an annual basis.

Overall Level of Prices

The overall level of prices refers to the average price of goods and services across the economy at a given time.

Consumer Spending

The total amount spent by consumers on goods and services within a particular period, driving a significant portion of economic activity.

Transportation

The movement of people or goods from one location to another using various modes such as road, rail, air, or sea.