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:

Negotiable Instrument

A written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.

Maker

The party in a transaction who creates or issues a promissory note, thereby promising to pay a certain sum to a specified person or entity.

Bearer

A person in possession of a negotiable instrument, such as a check or bond, that is payable to whomever holds it.

Drawer

In the context of banking and finance, it refers to the person who writes or issues a cheque or draft instructing the bank to pay a specified sum.