What is the EOQ model? What assumptions are necessary to apply
it? How do these assumptions change the nature of the cycle
inventory pattern graphically?
Question 3
a. Explain the assumptions in the
Black-Scholes-Merton model?
b. What is the price of a European call option on a
non‐dividend‐paying stock with the stock price is £73, with a
strike price is £73, volatility is 40% pa. risk‐free interest rate
is 10% pa, and the time to maturity is 6 months?
c. Without applying the Black‐Scholes model, what is
the price of a 6 month European put on the same stock in b) with
strike price of...
For IEUBK Model) 1.What assumptions are made when using this
type of model? That is what values or relationships must the model
include, which you did not supply. 2.What are the model supplied
(“fixed") parameters which are assumed? 3.What are the
user-supplied input variables required to run the model?