Empirical Tests of the Black-Scholes Option Pricing Formula

question 45

Multiple Choice

Empirical tests of the Black-Scholes option pricing formula

• A)shows that binomial option pricing is used widely in practice, especially by international banks in trading OTC options.
• B)works well for pricing American currency options that are at-the-money or out-of-the-money.
• C)does not do well in pricing in-the-money calls and puts.
• D)both b and c

Understand the concept of true social costs associated with environmental damages.

Discuss the ethical and legal challenges surrounding biotechnology and intellectual property rights (e.g., biopiracy).

Explore the effectiveness of technological advancements and their role in addressing environmental issues.

Appreciate the impact of environmental inequalities and racism.

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