The Black-Scholes Model Assumes That Stock Price Movements Can Be

question 35

Multiple Choice

The Black-Scholes model assumes that stock price movements can be described by

• A) geometric moving averages.
• B) arithmetic moving averages.
• C) regression towards the mean.
• D) geometric Brownian motion.
• E) stochastic time lags.

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Definitions:

Paired Comparison

A technique used in decision making and evaluation to compare each entity in a list with every other entity pairwise.

Performance Appraisal

The process by which a manager or consultant evaluates and documents an employee's performance, typically on an annual basis.

Central Tendency Error

A bias in evaluating others where assessments tend to cluster around a central point, ignoring extreme performances.

Performance Appraisal

A systematic evaluation process in which the work performance of an employee is assessed, typically by their manager, with feedback provided for future improvement.