| "A pricing model devised by Fischer Black and Myron Scholes in 1973. Its key element is the assumption that option prices have maximum and minimum values. The maximum value a call option can ever reach is the value of the share itself, because no one would ever pay more than the share price to acquire a right to buy the share. The minimum will be the difference between the share price and the option's exercise price. The model puts this assumption into a formula and adjusts it to account for: interest rates |
