Which Excel Formula Is Used to Execute the Black-Scholes Option

question 12

Multiple Choice

Which Excel formula is used to execute the Black-Scholes option pricing model?

• A) NORMAL
• B) ABNORMAL
• C) NORMSDIST
• D) DIST
• E) NORMALDIST

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Definitions:

Beta

A standard for evaluating how the systematic risk or volatility of a security or portfolio stands in relation to the entire market.

Portfolio

A collection of financial assets such as stocks, bonds, commodities, currencies, and cash equivalents, as well as their fund counterparts.

Risk Premium

The extra return expected by investors for taking on additional risk over the risk-free rate.

Risk-Free Rate

The risk-free rate is the theoretical return of an investment with zero risk, typically represented by the yield on government securities.