In the Black-Scholes Model, If an Option Is Not Likely

question 9

Multiple Choice

In the Black-Scholes model, if an option is not likely to be exercised, both N(d₁) and N(d₂) will be close to ________. If the option is definitely likely to be exercised, N(d₁) and N(d₂) will be close to ________.

• A) 1; 0
• B) 0; 1
• C) −1; 1
• D) 1; −1

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Definitions:

Viable Offspring

Offspring that are capable of survival and reproduction, contributing to the genetic continuity of a species.

Acoustical Stimuli

Sounds or auditory signals that can trigger a physiological or behavioral response in organisms.

Social Interaction

The dynamic process by which people relate to and influence each other through communication and behavioral exchanges.

Innate Behaviors

Instinctive actions or responses that organisms are born with, which do not require learning or experience.