Which of the Following Statements Is False

question 12

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.

---

Definitions:

Economics in Practice

This phrase refers to the real-world application of economic theories and principles to solve practical problems in industries and policy making.

Infant Mortality Rate

A statistical measure indicating the number of deaths of infants under one year of age per 1,000 live births in a given year, often used as a health status indicator for a country.

Labor Force

The total number of people who are available to work, including both employed and unemployed individuals actively seeking employment.

Developed Countries

Nations with generally advanced technological infrastructure, high levels of income, and comprehensive social support systems.