Which of the following is an assumptions of the Black-Scholes-Merton (BSM) optio
ID: 2806409 • Letter: W
Question
Which of the following is an assumptions of the Black-Scholes-Merton (BSM) option-pricing model?
The distribution of the underlying stock price is normal.
the risk free rate is positively correlated with the underlying stock price.
Transaction costs are zero.
Options valued are American style.
A.The distribution of the underlying stock price is normal.
B.the risk free rate is positively correlated with the underlying stock price.
C.Transaction costs are zero.
D.Options valued are American style.
Explanation / Answer
Answer) One of the assumptions of Black Scholes Model is Transaction costs and No commissions involved.
Answer - Option C)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.