QUESTION 53

Which of the following statements are accurate regarding the pricing of equity options on dividend paying stocks?

(i) The Binomial model can be used to value European and American options. (ii) The Black-Scholes model can be used to value European and American options.

(iii) The Binomial model can only be used to value American options.

(iv) The Black-Scholes model can only be used to value European options.

A. (i) and (ii)

B. (i) and (iv)

C. (iii) and (iv)

D. (ii) and (iii)