To use the Black-Scholes model to value a call option, you do not need the
A) length of time until the option expires.
B) riskfree rate.
C) hedge ratio.
D) market price of the stock.

Question

Quizplus · Accepted Answer

The Black-Scholes model assumes a constant hedge ratio, so you do not need to input or calculate it separately. However, you do need the length of time until the option expires (A), the risk-free rate (B), and the market price of the stock (D) to use the model.

To Use the Black-Scholes Model to Value a Call Option