Which of the Following Quantities Associated with Equity Option Pricing

question 11

Multiple Choice

Which of the following quantities associated with equity option pricing is model dependent?

• A)Stock price.
• B)Implied volatility.
• C)Interest rate.
• D)Dividend rate.

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Definitions:

FASB

Financial Accounting Standards Board, an organization responsible for setting accounting and financial reporting standards in the United States.

IFRS

International Financial Reporting Standards, a set of accounting standards that provide guidelines for financial reporting, aiming to make company accounts understandable and comparable across international boundaries.

GAAP

In any particular legal area, the Generally Accepted Accounting Principles are the recognized standard of guidelines for conducting financial accounting.

Probable

Probable refers to the likelihood that a future event will occur, often used in accounting to determine if a contingent event should be recorded.