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Well...the way I'd explain it is as "the worst atrocity ever inflicted on the financial world." Which may not be specifically true, but it's not far off.
Black-Scholes is a neat schoolhouse formula for determining The Proper Price To Trade Options At.
Here's the problem: Black and Scholes assume there's only one risky item in an options transaction, and it's the stock. The money you use to buy it is considered riskless, and you can borrow as much as you want at a low interest rate. There are no transaction fees, and you can sell even a fraction of a share of stock. Unfortunately, none of those things are actually true.
Those who believe in Black-Scholes believe you can put hard, scientifically-valid formulas to work to determine the price of something which can't actually be priced out that way, and they've cost people a LOT of money by doing it.
What else can I help you with?
What is the calculation for consumers surplus?
Consumer Surplus = the difference between what consumers are willing to pay and what they actually pay for a good or service. It is hard to explain this thru formula as it require a long explanation and debrief. Essentially it is represented by a triangle, and the surplus is calculated thru the formula to calculate a Triangles height. That is (BASE x HEIGHT)/2 I have attached a link below. Please refer it for details.
How do you explain the law of variable proportion?
Explain the Law of Variable Propotion
A common formula error?
There are two common formula errors. One error is that the formula is read wrong. The other error is that the formula is written down incorrectly.
How do you explain five traits of the entrepreneurial ventures?
explain five traits in the entrepreneurial ventures.
Explain macroeconomics objectives from the conventional perspective?
Explain macroeconomics objectives from the conventional perspective?
Formula transformation and give an example of formula?
explain formula transformation
How transfor the formula of power is force is required explain?
how transform the formula of power is force is required explain
Explain the difference between molecule and formula unit?
The formula unit is the representation of a molecule.
How are the empirical and molecular formulas for a compuond related?
An empirical formula is a brutto formula; a molecular formula explain the structure of a molecule.
Explain specifically what the subscripts mean in the molecule formula C6H12O6?
explain specifically what the subscripts mean in the molecule formula c 6 h 12 o 6
Can anyone explain the great circle formula in layman terms?
Yes the great circle formula is the same formula for any other circle.
Why the atomic symbol and the molecular formula of cupper are same?
why is the atomic symbol and the molecular formula of copper the same?its because of the formula being for copper its the same as the... idk how to explain
What is the formula for finding current?
See OHMS LAW on the internet with a search engine. It will explain everything.
What is pipelining explain its working in detail?
pipe line is the processing of pipe line in which contain the formula
Is ammonia a compound or element explain?
it is a compound , it is made up of nitrogen and hydrogen with the formula NH3
Explain formula volume expansion coefficient subject expansion of solid?
Formula for the volume Expansion for a solid is αV=1VdVdT and Isotropic materials is αV=3αL.
How can calculate capacitor bank for factory with 4mb . please with formula?
You need to explain what you mean by '4 mb'.
