Select all that are true with respect to the Black Scholes Option Pricing Model (OPM) in practice): Group of answer choices   BSOPM assumes that the volatility of the underlying stock returns is constant over time. BSOPM assumes that the underlying stock can be traded continuously. BSOPM assumes that there are no transaction costs. There is only one input to the BSOPM that is not observable at the time you are valuing a stock option, and that input is volatility. Implied volatility is estimated by calculating the daily volatility of the underlying stock’s return that occurred over the prior six months.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Select all that are true with respect to the Black Scholes Option Pricing Model (OPM) in practice):
Group of answer choices
 
BSOPM assumes that the volatility of the underlying stock returns is constant over time.
BSOPM assumes that the underlying stock can be traded continuously.
BSOPM assumes that there are no transaction costs.
There is only one input to the BSOPM that is not observable at the time you are valuing a stock option, and that input is volatility.
Implied volatility is estimated by calculating the daily volatility of the underlying stock’s return that occurred over the prior six months.
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