Which of the Following Is Assumed by the Black-Scholes-Merton Model

question 20

Multiple Choice

Which of the following is assumed by the Black-Scholes-Merton model?

• A) The return from the stock in a short period of time is lognormal
• B) The stock price at a future time is lognormal
• C) The stock price at a future time is normal
• D) None of the above

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Definitions:

Current Account Deficit

A measurement of a country's trade where the value of the goods and services it imports exceeds the value of the products it exports.

U.S. Dollars

The official currency of the United States, widely used as a benchmark and reserve currency globally.

Trade Deficit

Occurs when a country's imports exceed its exports during a specific period, indicating a negative balance of trade.

Billion

A numerical value representing one thousand million (1,000,000,000).