Which of the following is assumed by the Black-Scholes-Merton model?
A. The return from the stock in a short period of time is lognormal
B. The stock price at a future time is lognormal
C. The stock price at a future time is normal
D. None of the above
B
Black-Scholes-Merton assumes that the return from a stock in a short period of time is normally distributed. This means that the stock price at a future time is lognormally distributed.
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A broker performed a competitive market analysis and determined that the comparable homes are in better overall condition and the sellers property. What adjustments should be made?
A)The sales price of the comparable should be adjusted upward. B)The sales price of the subject should be adjusted upward. C)The sales prices of the comparables should be adjusted downward. D) The listing price of the subject should be the assessed value.
A customer requested a price from a carpenter on a teak cabinet to be built according to the buyer's specifications. Because teak wood is difficult to obtain, the customer agreed to pay the cost of the wood plus $175 and the carpenter agreed to build it. Which of the following is correct?
A) Although the price is somewhat unclear, the parties have entered into a contract. B) This is an agreement to agree, and is not binding. C) This agreement fails for indefiniteness. D) The carpenter is bound by the agreement, but not the customer.