Which of the Following Is Not Necessary to Know in Order

question 21

Multiple Choice

Which of the following is not necessary to know in order to calculate the price of a call option?

• A)the expected rate of return on the underlying stock
• B)the strike price of the option
• C)the risk-free interest rate
• D)All of the above are necessary inputs in calculating the price of a call option.

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Definitions:

Absolute Refractory

The absolute refractory period is a time during which a nerve or muscle is incapable of responding to stimulation, immediately following an action potential.

Action Potentials

Rapid, short-lasting events where the electrical membrane potential of a cell rapidly rises and falls, typical in neurons and muscle cells during signal transmission.

Period

A length or span of time; in grammar, it is a punctuation mark used to denote the end of a sentence.

Neurotransmitters

Chemical substances in the nervous system that transmit signals across a synapse from one neuron to another.