Which of the inputs in the Black-Scholes option pricing model are directly observable?

A) The price of the underlying security
B) The risk-free rate of interest
C) The time to expiration
D) The variance of returns of the underlying asset return
E) The price of the underlying security, risk-free rate of interest, and time to expiration

Black-Scholes Model

A mathematical model used for pricing European style options, taking into account the stock price, strike price, risk-free rate, time to expiration, and volatility.

Risk-Free Rate

The theoretical return on investment with no risk of financial loss, typically represented by the yield of government securities.

Time To Expiration

This refers to the remaining time until a derivative contract, such as an option or futures contract, becomes invalid or ceases to exist.