What Was the Original Black-Scholes-Merton Model Designed to Value

question 12

Multiple Choice

What was the original Black-Scholes-Merton model designed to value?

• A) A European option on a stock providing no dividends
• B) A European or American option on a stock providing no dividends
• C) A European option on any stock
• D) A European or American option on any stock

---

Definitions:

Average Cost Method

An inventory costing method that determines the cost of goods sold and ending inventory based on the weighted average cost of all items available for sale.

Gross Profit

calculates as the difference between revenue and the cost of goods sold, indicating how efficiently a company uses its resources to produce goods.

Ending Inventory

The total value of all inventory, including goods in various stages of production, available at the end of an accounting period.

FOB Destination

A shipping term indicating that the seller bears transportation costs and risk until the goods reach the buyer's location.