Which of the Following Statements Is FALSE

question 20

Multiple Choice

Which of the following statements is FALSE?

• A)N(d)is the cumulative normal distribution-that is,the probability that a normally distributed variable is greater than d.
• B)Of the five required inputs in the Black-Scholes formula,four are directly observable.
• C)The Black-Scholes formula is derived assuming that the call is a European option.
• D)The Black-Scholes Option Pricing Model can be derived from the Binomial Option Pricing Model by making the length of each period,and the movement of the stock price per period,shrink to zero and letting the number of periods grow infinitely large.

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Definitions:

Ice Cream

A frozen dessert made from dairy products, such as milk and cream, combined with flavorings and sweeteners, often eaten as a snack or dessert.

Perfectly Competitive

A market structure where many firms offer homogenous products, entry and exit are easy, and no single buyer or seller can influence the market price.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a given price at a specific time.

Good Y

A hypothetical or symbolic representation of a product or service in economic analyses to examine effects on demand, supply, and market dynamics.