Which One of the Following Variables Is NOT Included in the Black-Scholes

question 62

Multiple Choice

Which one of the following variables is NOT included in the Black-Scholes option pricing model?

• A)strike price
• B)time remaining until option expiration
• C)stock volatility as measured by standard deviation
• D)stock price
• E)market rate of return

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Definitions:

Inventory

An accounting term for goods and materials held by a company in stock with the intention of selling them or transforming them in the production process.

Consolidated Cost

The combined cost of an asset that includes the purchase price and all costs necessary to prepare the asset for its intended use, within a group of consolidated companies.

Cost Method

An accounting method used for investments, where the investment is recorded at cost and adjusted only for dividends received.

Consolidated Financial Statements

Financial reports that aggregate the financial position, results of operations, and cash flows of a parent company and its subsidiaries.