Which of the Following Is an Assumption in the Black-Scholes

question 1

Multiple Choice

Which of the following is an assumption in the Black-Scholes valuation?

• A)Short selling of securities is not permitted in the market.
• B)Securities don?t make periodic payments such as for interest or dividends.
• C)The logarithm of the return on the underlying equity is normally distributed.
• D)Macroeconomic events have no effect on the prices of securities.

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Definitions:

False Imprisonment

False imprisonment is the unlawful restraint of a person against their will, without legal justification.

Intentional Confinement

The deliberate restriction of a person's freedom of movement without lawful justification.

Defense

The evidence and arguments presented in support of the defendant's case in a criminal action or lawsuit.

Contributory Negligence

A theory in tort law under which a complaining party’s own negligence contributed to his or her injuries. Contributory negligence is an absolute bar to recovery in some jurisdictions.