In the Two State Option Pricing Model,which of the Following

question 8

Multiple Choice

In the two state option pricing model,which of the following does not influence the option price?

• A) Past stock price
• B) Up and down factors u and d
• C) The risk free rate
• D) The exercise price
• E) Current stock price

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Definitions:

Action Potential

A neural impulse; a brief electrical charge that travels down an axon.

Axon

An elongated, thin extension of a neuron that transmits electrical signals from the cell body of the nerve cell.

Electrical Charge

A physical property that causes particles or objects to experience a force within an electromagnetic field.

Serotonin

A neurotransmitter involved in many functions including mood regulation, appetite, and sleep, often associated with feelings of well-being and happiness.