What Are the Variables in the Black-Scholes Option Pricing Model

question 20

Essay

What are the variables in the Black-Scholes option pricing model? How is each related to the price of the call option?

---

Definitions:

Ratification

The act of formally confirming or approving an agreement or act, making it officially valid.

Void

Refers to a legal declaration that an agreement or transaction is null and has no legal effect.

Mentally Impaired

Describes a condition where an individual's cognitive, emotional, or social abilities are significantly reduced compared to normative levels, potentially impacting their decision-making capacity.

Ratified

An action making an agreement officially valid after all parties involved have given their formal approval.