Which of the Following Is Not an Assumption Underlying the Black-Scholes

question 43

Multiple Choice

Which of the following is not an assumption underlying the Black-Scholes option-pricing model?

• A) The risk-free rate is known and constant over the life of the option.
• B) The probability distribution of stock prices is lognormal.
• C) The world is risk-neutral.
• D) The variability of a stock's return is constant.
• E) There are no transaction costs involved in trading options.

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Definitions:

Evaluation Interviews

are formal discussions between a supervisor and an employee to review performance, set goals, and discuss career development.

Performance Feedback

The process of providing employees with information about their job performance and suggestions for improvement.

360-degree Feedback

A performance appraisal process where an employee receives feedback from all directions - supervisors, peers, and subordinates.

Performance Appraisals

The systematic evaluation of an employee's job performance and overall contribution to an organization, typically involving the assessment of various criteria.