The Black-Scholes Option Pricing Model, developed by Fischer Black and Myron Scholes, is a mathematical model used to determine the fair value of options by incorporating factors such as volatility, interest rates, stock prices, exercise prices, and time until expiration.
A term frequently used on Wall Street to describe the use of borrowed funds by individuals or companies to increase the return on invested capital, as well as an acronym for the options pricing model.
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