EconoFiction

What Black-Scholes-Merton means to a speculative materialist

25 Mai , 2020  

Even those persons paralyzed by anxiety over their lack of knowledge of financial economics will intuitively grasp that uncertainty pervades an attempt to ascertain what will have been the value of an asset in the future, relative to its subsequent past value now in the present. Can this even be done? ...

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EconoFiction

Derivative Pricing Theory: Call, Put Options and “Black, Scholes’” Hedged Portfolio

10 Okt , 2018  

Fischer Black and Myron Scholes revolutionized the pricing theory of options by showing how to hedge continuously the exposure on the short position of an option. Consider the writer of a call option on a risky asset. S/he is exposed to the risk of unlimited liability if the asset price ...

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