Which of the following is assumed by the Black-Scholes-Merton model?
A. The return from the stock in a short period of time is lognormal
B. The stock price at a future time is lognormal
C. The stock price at a future time is normal
D. None of the above
Answer:B
Which of the following is assumed by the Black-Scholes-Merton model?
A. The return from the stock in a short period of time is lognormal B. The stock price at a future time is lognormal C. The stock price at a future time is normal D. None of the above