In real-life situations,it is necessary to use option valuation methods since:
A) the discount rate can be obtained easily.
B) the discount rate cannot be obtained easily.
C) the discount rate is constant.
D) the discount rate is published daily in the Wall Street Journal.

Question

Quizplus · Accepted Answer

In real-life situations, it is often difficult to obtain the discount rate, as it may depend on various factors such as market conditions, risk, and time until expiration. Therefore, option valuation methods are necessary to determine the fair value of options based on various assumptions and inputs.

In Real-Life Situations,it Is Necessary to Use Option Valuation Methods