Which of the Following Characteristics of the Black-Scholes-Merton Model Is

question 17

Multiple Choice

Which of the following characteristics of the Black-Scholes-Merton model is not correct?

• A)it is a discrete time model
• B)it is the limit of the binomial model
• C)it is a continuous time model
• D)it gives the price of a European option
• E)none of the above

Apply the Kruskal-Wallis test and interpret its results.

Recognize the significance levels and how they influence the outcome of hypothesis tests.

Understand the concept of distribution used in nonparametric tests.

Distinguish between one-tail and two-tail tests in nonparametric testing.

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Definitions:

Friedman Test

An analysis technique without reliance on parameter assumptions for discerning treatment disparities across multiple testing occasions.

Distribution

The way in which something is shared out among a group or spread over an area, or the set of all possible values of a variable and how frequently they occur.

P-value

The probability of observing a test result at least as extreme as the one observed, under the assumption that the null hypothesis is true.

Kruskal-Wallis Test

The Kruskal-Wallis test is a non-parametric method for testing whether samples originate from the same distribution, used when the assumptions of one-way ANOVA are not met.