Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Which of the following is not a reason that Black-Scholes option pricing formula won Nobel price? It does not depend on drift rate, hence is

Which of the following is not a reason that Black-Scholes option pricing formula won Nobel price?

  1. It does not depend on drift rate, hence is independent to investors risk preference
  2. It can price both European and American options
  3. Black-Scholes introduces dynamic hedge which completes the market.
  4. None of the above

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Markets And Institutions

Authors: Anthony Saunders, Marcia Cornett

7th Edition

1259919714, 978-1259919718

More Books

Students also viewed these Finance questions

Question

How do response elements modulate RNA transcription?

Answered: 1 week ago