Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A)If you take the option price quoted in the market as an input and solve for the volatility,you will have an estimate of a stock's volatility known as the implied volatility.
• B)The Black-Scholes formula can be used to price American or European call options on non-dividend-paying stocks.
• C)We need to know the expected return on the stock to calculate the option price in the Black-Scholes Option Pricing Model.
• D)We can use the Black-Scholes formula to compute the price of a European put option on a non-dividend-paying stock by using the put-call parity formula.

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Definitions:

Convicted of a Criminal Offence

Found legally guilty of violating criminal law.

Compensated for Injury

Receiving payment or restitution for physical or psychological harm suffered due to another's negligence or wrongdoing.

Balance of Probabilities

The standard of proof in civil cases, where the likeliness of one's claim being true must be greater than 50%.

Prosecutor

An attorney or legal official who presents the case against an individual accused of breaking the law in a criminal trial.