links for 2009-08-25

  • This'll cause a stir…
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  • The term Black–Scholes refers to three closely related concepts:

    * The Black–Scholes model is a mathematical model of the market for an equity, in which the equity's price is a stochastic process.
    * The Black–Scholes PDE is a partial differential equation which (in the model) must be satisfied by the price of a derivative on the equity.
    * The Black–Scholes formula is the result obtained by solving the Black-Scholes PDE for a European call option.


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