Which of the Following Is Not Used in the Black-Scholes

question 56

Multiple Choice

Which of the following is not used in the Black-Scholes option pricing formula?

• A) stock price
• B) dividend yield
• C) strike price
• D) risk-free rate

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Definitions:

MR = MC Rule

The MR=MC rule states that profit maximization occurs when a firm produces at a level where marginal revenue equals marginal cost.

Price Taker

A market participant that accepts market prices as given and cannot influence those prices.

Monopolies

Market situations where a single company or entity has exclusive control over a particular product or service, leading to less competition.

Average Total Cost

The total cost of production divided by the quantity produced, representing the average cost per unit.