Which of the Inputs in the Black-Scholes Option Pricing Model

question 81

Multiple Choice

Which of the inputs in the Black-Scholes option pricing model are directly observable?

• A) The price of the underlying security
• B) The risk-free rate of interest
• C) The time to expiration
• D) The variance of returns of the underlying asset return
• E) The price of the underlying security, risk-free rate of interest, and time to expiration

---

Definitions:

Iris

The colored part of the eye surrounding the pupil, controlling light levels entering the eye.

Macula Lutea

A small, yellowish central area of the retina that is rich in cones and mediates clear, detailed vision.

Cone Density

The distribution of cone cells in the retina, which are sensitive to color and are used for high visual acuity.

Retina

A light-sensitive layer at the back of the eye, containing cells that convert light into neural signals sent to the brain.