what is black scholes theory and anti matter
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The Black-Scholes model, also known as the Black-Scholes-Merton (BSM) model, is one of the most important concepts in modern financial theory. This mathematical equation estimates the theoretical value of derivatives other investment instruments, taking into account the impact of time and other risk factors. Developed in 1973, it is still regarded as one of the best ways for pricing an options contract.
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The Black-Scholes model, aka the Black-Scholes-Merton (BSM) model, is a differential equation widely used to price options contracts.
The Black-Scholes model requires five input variables: the strike price of an option, the current stock price, the time to expiration, the risk-free rate, and the volatility.
Though usually accurate, the Black-Scholes model makes certain assumptions that can lead to prices that deviate from the real-world results.
The standard BSM model is only used to price European options, as it does not take into account that American options could be exercised before the expiration date.
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