Spencer, CPA, has been engaged to audit the fair value measurements of Christensen & Son, a high-tech company in the Midwest. During the audit, Spencer must obtain evidence that management of Christensen & Son has appropriately valued the following two accounts:

1. Available-for-Sale Stock Portfolio, containing investments in Fortune 100 company stocks.
2. Stock compensation expense related to stock options granted to Christensens employees as valued by the Black-Scholes option-pricing model. Christensens stock is largely held by the owners and neither the companys stock nor the related stock options are actively traded.

Required:

a. Identify the fair value input for the following accounts. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)

Available-for-sale stock portfolio. Mark all that apply

• Time
• Standard deviation
• Current stock price
• Exercise price
• Dividend-yield
• Risk-free rate

Option expense. Mark all that apply.

• Time
• Standard deviation
• Current stock price
• Exercise price
• Dividend-yield
• Risk-free rate