Explain One Way We Can Detect Black Holes

question 57

Essay

Explain one way we can detect black holes.

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Definitions:

American Put Option

A type of put option that can be exercised at any time before its expiration date, allowing the holder to sell the underlying asset at the strike price.

Underlying Asset

The financial asset upon which a derivative's value is based, such as stocks, bonds, commodities or currencies.

Black-Scholes

A mathematical model used to price European options, evaluating their potential value by factoring in volatility, asset price, time, and risk-free rate.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, often represented by the yield on government bonds.