Why do traders use volatility smiles for pricing options?
A. To allow for non-lognormality of the probability distribution of future asset price
B. Because it is consistent with recent market moves
C. As a tool to reflect their views about extreme market moves
D. Because extreme market moves are always more likely than Black-Scholes-Merton assumes
A
Volatility smiles allow for the fact that the assumptions underlying the Black-Scholes-Merton model do not hold exactly. The BSM assumptions imply a lognormally distributed future asset price.
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Which of the following is NOT an internal control over the petty cash fund?
A) Petty cash tickets are sequentially numbered. B) A specific amount of cash is designated to be kept in the petty cash fund. C) Petty cash tickets serve as the authorization voucher and explanation. D) Two custodians should be assigned responsibility for the petty cash fund.
Which of the following is the true function of the résumé?
A) To compel employers to hire you B) To compel employers to set up an interview with you C) To highlight skills and abilities needed to progress on the career ladder D) To impress the employer with industry specific buzzwords and jargon E) To list all your skills and abilities
What do MRO products and consumer convenience products have in common? How do they differ?
What will be an ideal response?
What are the cash flows patterns related to bonds?