Which of the Following Statements Is FALSE

question 20

Multiple Choice

Which of the following statements is FALSE?

• A)N(d)is the cumulative normal distribution-that is,the probability that a normally distributed variable is greater than d.
• B)Of the five required inputs in the Black-Scholes formula,four are directly observable.
• C)The Black-Scholes formula is derived assuming that the call is a European option.
• D)The Black-Scholes Option Pricing Model can be derived from the Binomial Option Pricing Model by making the length of each period,and the movement of the stock price per period,shrink to zero and letting the number of periods grow infinitely large.

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Definitions:

Operating Activities

Activities that relate to the company's primary operations, including revenue generation, expenses, and cash flows.

Cash Dividends

Cash distributed by a corporation to its shareholders out of its earnings.

Net Cash

The amount of cash that remains after accounting for cash disbursements and receipts, indicating a company's liquidity position.

Operating Activities

Activities that constitute the primary or main activities of a business, like sales, provision of services, production, etc., which are reflected in the cash flow from operating activities in the financial statements.