Which One of the Five Factors Included in the Black-Scholes

question 64

Multiple Choice

Which one of the five factors included in the Black-Scholes model cannot be directly observed?

• A)risk-free rate
• B)strike price
• C)standard deviation
• D)stock price
• E)life of the option

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Definitions:

Delivery Vans

Vehicles specifically designed and used for the transportation of goods from a seller or distribution center to a destination point.

Expected Rate

The anticipated return on an investment, considering the probability of various outcomes.

Interest Rate

The cost of borrowing money or the reward for saving, typically expressed as a percentage of the principal amount per period.

Expected Rate

A statistical measure often used to indicate the anticipated return or performance of an investment or economic variable over a specific period.