One Key Difference Between the Black and Scholes (B&S)option Pricing

question 45

Multiple Choice

One key difference between the Black and Scholes (B&S) option pricing model and the binomial model is that the B&S model assumes the ____ is known whereas the binomial model does not.

• A) current market value of the underlying asset
• B) annual risk-free rate
• C) strike price
• D) time until expiration
• E) standard deviation of the underlying asset

---

Definitions:

Extracellular Matrix

A complex network of proteins and carbohydrates surrounding cells, providing structural and biochemical support to tissues and organs.

Elastin

A protein in connective tissue that provides elasticity and resilience, allowing tissues like skin and lungs to resume shape after stretching or contracting.

Fibrous Protein

Proteins that have a structural function, characterized by elongated and insoluble molecular structures, such as collagen in connective tissues.

Connective Tissue

Tissue that supports, binds together, and protects tissues and organs in the body.