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Which of the following is true regarding the Black-Scholes formula? 1) The binomial solution converges to the Black-Scholes formula when taking infinite number of steps.
Which of the following is true regarding the Black-Scholes formula? 1) The binomial solution converges to the Black-Scholes formula when taking infinite number of steps. II) The Black-Scholes formula can be also applied to other underlying assets such as foreign currencies. III) The Black-Scholes formula can only be applied to European option, not American one. IV) There is general no simple formula comparable to the Black-Scholes formula to price American options. I ll only 1.II and III only I, II and IV only All of above
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