Which of the Following Statements Is Correct

question 18

Multiple Choice

Which of the following statements is correct?

• A) Prior to the Black-Scholes formula, most economists and practitioners anticipated that mathematical formulas could be derived that could accurately price financial securities such as options.
• B) Without the Black-Scholes formula, the job of corporate managers would be very different: many corporations would bear much less risk than they now do.
• C) The most important factors contributing to the huge growth in the types of financial securities that are available today are the techniques that everyone uses to discount them.
• D) It is not an exaggeration to say that the techniques developed by Black, Scholes, and Merton to value options changed the course of financial economics and gave birth to a new profession: financial engineering.

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