When Black's Model Used to Value a European Option on the Spot

question 20

Multiple Choice

When Black's model used to value a European option on the spot price of an asset,which of the following is NOT true?

• A) It is necessary to know the futures or forward price for a contract maturing at the same time as the option
• B) It is not necessary to estimate income on the underlying asset
• C) It is not necessary to know the risk-free rate
• D) The underlying asset can be an investment or a consumption asset

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A U.S. federal law aimed at reducing pollution and protecting the quality of waters.

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The contamination of water bodies such as lakes, rivers, oceans, and groundwater caused by harmful substances or heat, which degrades water quality and adversely affects aquatic ecosystems and human health.

Environmental Impact Statement

A document required for projects that may significantly affect the environment, detailing the potential impacts and mitigating strategies.

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A U.S. environmental law that promotes the enhancement of the environment and established the President's Council on Environmental Quality.