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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: rkral who wrote (64183)	6/6/2003 4:43:51 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 77400

re "further expansion of the definition of risk premium". LOL. Whose definition? Yours? And who is expanding the definition? You? LOL!!! GVTucker and I both are telling you risk premium is not* part of the Black-Scholes model. Here is the definition of black scholes. The bottom 2 items are (imho) RISK PREMIUM. The variables of the Black Scholes formula are: Stock Price Strike Price Time remaining until expiration expressed as a percent of a year Current risk-free interest rate Volatility measured by annual standard deviation. This is from the e-trade website. As you can see, they consider the "risk free interest rate" to be an element of the computation. You are certainly free to conclude that the financial dictionary on e-trade is wrong, however I would rather you take it up with them. Message 18991972