Economics, Econometrics and Finance
2 years ago

Revolutionizing investment strategy with Black-Scholes and Black-Scholes-Merton models.

1 view
BCP Business & Management
The Progress of Black-Scholes Model and Black-Scholes-Merton Model
Lujian Wang, Zhang Minqing, Zhao Liu

Paper Summary

The Black-Scholes model and Black-Scholes-Merton model are widely used in finance. This article explains how these models work and their applications, such as valuing projects and pricing employee stock options. The models have limitations due to ideal assumptions, like volatility smile, but suggestions for improvement are provided. These findings can help guide option pricing and investment strategies.

Related papers

Economics, Econometrics and Finance
2 years ago

Revolutionizing investment strategy with Black-Scholes and Black-Scholes-Merton models.

Real Options
Value-based Management
Option Pricing
2 views
Decision Sciences
2 years ago

Chinese Stock Index Options Market Shows Deviation from Black-Scholes Pricing Model

Stock Market Predictions
Oil Price Shocks
Asset Pricing
1 view
Business, Management and Accounting
4 years ago

Flawed use of stock options model leads to financial reporting errors.

Value-based Management
Corporate Governance
Real Options
1 view