Create a convincing argument that the upside financial benefits outweigh the downside risk related to options. Business and finance homework help

“Black-Scholes Options Pricing Model”

  • The Black-Scholes Options Pricing Model has been criticized based on underlying assumptions related to stock price fluctuations that may not be relevant in today‚Äôs marketplace where there is more volatility in stock prices. Assess the validity of this criticism, indicating how the impact of pricing volatility may be minimized. Provide support for your rationale. 
  • Create a convincing argument that the upside financial benefits outweigh the downside risk related to options. Provide support for your argument.

“Risk Management”

  • Assess the current market risk in the U.S. and Foreign Markets, indicating how a financial manager is likely to react given the risk level determined. Provide support for your answer.
  • Considering the market risks of interest rate, foreign exchanges, and commodity price risk, assess the risk that you believe may have the most significant impact on a firm. Indicate how this risk can be managed effectively to minimize the effects of this risk.

 
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