According to the Black-Scholes Option Pricing Model Which of the Following

question 93

Multiple Choice

According to the Black-Scholes option pricing model which of the following has the effect of decreasing the value of a call option?

• A) an increase in the stock price
• B) a higher strike price
• C) an increase in the standard deviation of the underlying asset price returns
• D) an increase in the risk-rate

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Definitions:

Social Bias

Prejudice or unfounded judgment toward individuals or groups based on societal stereotypes.

Theory Of Mind

One’s awareness that other people base their behaviors on their own beliefs, intentions, and mental states, not on information they have no way of knowing.

Egocentrism

A cognitive trait involving the inability to distinguish between one's own perspective and someone else's perspective.

Metacognitive Knowledge

An individual's awareness and understanding of their own thought processes.