Question
Which of the following will increase the value of a put option according to the Black-Scholes model? A decrease in the exercise price. An increase
Which of the following will increase the value of a put option according to the Black-Scholes model?
A decrease in the exercise price. | ||
An increase in the spot price of the underlying asset. | ||
A decrease in the volatility of the underlying asset. | ||
None of the above |
As the number of branches increase, the value of a call or put option obtained by using the binomial option pricing model will converge to the price obtained using the Black-Scholes option pricing model.
true or false
All of the variables relevant to the Black-Scholes model are known with certainty.
true or false
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