Economics, Econometrics and Finance
4 years ago

Black-Scholes Model Proven Effective for Banking Stock Options Pricing.

AN EMPIRICAL ANALYSIS OF BLACK-SCHOLES OPTION PRICING MODEL FOR SELECT BANKING STOCKS
Panduranga

Paper Summary

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Option pricing is important for hedging and speculation. The Black-Scholes model is commonly used for pricing options. A study tested this model on Indian banking stock options. Results showed that the model's expected prices matched market prices in three out of four cases, indicating its relevance for banking stocks.