In the Black-Scholes Option Pricing Model,what Does the Variable R

question 52

Multiple Choice

In the Black-Scholes option pricing model,what does the variable R represent?

• A)The annually compounded risk-free rate of return
• B)The continuously compounded variance
• C)The continuously compounded annual risk-free rate of return
• D)The annually compounded market rate of return
• E)The continuously compounded market rate of return

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Definitions:

Quantity Supplied

is the amount of a good or service that producers are willing and able to sell at a given price over a specified period of time.

Supply Increased

A situation in which the quantity of a good or service that producers are willing and able to offer for sale rises, possibly leading to lower prices.

Demand Increased

A situation where the desire or need for a product or service rises, leading to potentially higher prices and/or increased production.

Quantity Demanded

The overall volume of a good or service that individuals are prepared and capable of buying at a given price.