Which of the Following Is Not Part of the Black

question 20

Multiple Choice

Which of the following is not part of the Black Scholes option pricing model?

• A) Standard deviation
• B) Time to maturity
• C) Exercise price
• D) Par value of the company's stock

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Definitions:

Annualized Yield

The yearly return on an investment, expressed as a percentage, accounting for compounding interest.

Maturity

The specified time in the future when the principal amount of a financial instrument, such as a bond, becomes due and is repaid to the investor.

Bonds

Fixed-income investments representing loans made by an investor to a borrower, typically corporate or governmental.

Real Rate Of Return

The annual rate of return on an investment, adjusted for inflation, reflecting the actual purchasing power of the earnings.