17-21

17. In the Black-Scholes model, the symbol "a" is used to represent the the: a. option premium on a call with a specified exercise price. b. rate of return on the underlying asset. c. volatility of the risk-free rate of return. d. rate of return on a risk-free asset. e. option premium on a put with a specified exercise price. 18. Which one of the following statements is correct? t0 a. The price of an American put is equal to the stock price minus the exercise price the Black-Scholes option pricing model. b. The value of a Bauropean pu is greater than the value of a comparable American put. c. The value of a put is equal to one minus the value of an equivalent call. d. The value of a put minus the value of a comparable call is equal to the value of the stock minus the exercise price. e. The value of an American put will equal or exceed the value of a comparable European put 19. The Black-Scholes Option Pricing Model can be used for: a. American options but not European options. b. European options but not American options. c. call options but not put options. d. put options but not call options e. both zero coupon bonds and coupon bonds. 20. Which of the following variables is included in the Black-Scholes call option pricing formula? I put premium I. stock beta 111, exercise price IV, stock price a. III and IV only b. I, II, and IV only c. II, II1, and IV only d. I, III, and IV only e, I, ll, III, and IV 21The value of a call option delta is: a. between zero and one. b. less than or equal to one. c. greater than zero. d. greater than or equal to zero. e. less than or equal to one