A Modification to the BSM Option Pricing Model Developed by Robert

question 17

Multiple Choice

A modification to the BSM option pricing model developed by Robert Merton (1973) was formulated to price:

• A) American options on equity with dividends
• B) American options on equity with no dividends
• C) European options on equity with a known dividend yield
• D) European options on equity with no dividends
• E) European options on commodity futures

---

Definitions:

Sperm Production

The biological process of producing sperm cells in the male reproductive organs, particularly in the testicles, essential for sexual reproduction.

Penis Size

A measure of the length and girth of a male's genital organ, often a subject of various cultural perceptions and personal concerns.

Heredity

The transmission of genetic traits and characteristics from parents to offspring.

Corpora Cavernosa

Corpora Cavernosa are two columns of sponge-like tissue found in the penis that fill with blood during an erection, contributing to its rigidity.