The Implied Standard Deviation Used in the Black-Scholes Option Pricing

Multiple Choice

The implied standard deviation used in the Black-Scholes option pricing model is:

A) based on historical performance.
B) a prediction of the volatility of the return on the underlying asset over the life of the option.
C) a measure of the time decay of an option.
D) an estimate of the future value of an option given a strike price (E) .
E) a measure of the historical intrinsic value of an option.