Which One of the Five Factors Included in the Black-Scholes

question 64

Multiple Choice

Which one of the five factors included in the Black-Scholes model cannot be directly observed?

• A)risk-free rate
• B)strike price
• C)standard deviation
• D)stock price
• E)life of the option

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Definitions:

Equity Theories

A set of theories in psychology and organizational behavior that focus on the principles of fairness and justice in social relationships, particularly in the workplace.

Social Exchange

A theory in social science that proposes human interactions are based on the exchange of goods, services, information, or emotional support, where the goal is to maximize benefits and minimize costs.

Motivation

The driving force that initiates and directs behavior toward achieving a goal.

Theory Y

A management concept that assumes employees are self-motivated, seek responsibility, and can be creative within work conditions.