Important Assumptions Justifying the Black-Scholes Formula Include

Multiple Choice

Important assumptions justifying the Black-Scholes formula include:
I.The price of the underlying asset follows a lognormal random walk.
II.Investors can adjust their hedge ratio continuously and at no cost.
III.The risk-free rate is known.
IV.The underlying asset does not pay dividends.

A) I only
B) I and II only
C) I, II, III, and IV
D) III and IV only