Question $5(1$ point$)$ ltst

$8.$ Black$-$Scholes Assumptions

Which of the following assumptions are made in the Black$-$Scholes option pricing formula derivation? Choose all that apply.

Question $5$ options:

The stock underlying the call option provides no dividends or other distributions during the life of the option.

There are no transaction costs for buying or selling either the stock or the option.

The short$-$term, risk$-$free interest rate is known and is constant during the life of the option.

Any purchaser of a security may borrow any fraction of the purchase price at the short$-$term, risk$-$free interest rate.

Short selling is permitted, and the short seller will receive immediately the full cash proceeds of today's price for a security sold short.

The call option can be exercised only on its expiration date.

Trading in all securities takes place continuously, and the stock price moves randomly.

The standard deviation of the stock return is constant.