Knowra Fischer Black Fischer Black Fischer Black (1938–1995) was an American economist whose work on option pricing helped produce the Black–Scholes model and reshape quantitative finance.
Myron Scholes : Myron Scholes is an American economist who co-developed the Black–Scholes option-pricing model. Black and Scholes jointly developed the model that made Black’s option-pricing work widely known.
Black–Scholes model : The Black–Scholes model estimates European option prices using stock price, strike, time, volatility, interest rates, and assumptions about markets. This is the best-known model arising from Black’s collaboration with Scholes.
Harvard University : Harvard University is a private research university in Cambridge, Massachusetts, founded in 1636. Black studied physics there before turning toward applied mathematics and economics.
Options market : An options market is a marketplace for contracts granting rights to buy or sell assets at specified prices and times. Black’s pricing framework helped market participants value and trade options systematically.
Robert C. Merton : Robert C. Merton is an American economist who developed continuous-time finance and extended option-pricing theory. Merton independently derived and generalized the option-pricing framework associated with Black and Scholes.
Black–Scholes equation : The Black–Scholes equation is a partial differential equation governing the price of an option under specified market assumptions. Black’s hedging argument yields the differential equation behind the model’s pricing formula.
University of Chicago Booth School of Business : The University of Chicago Booth School of Business is a graduate business school at the University of Chicago. Black taught at Chicago, where he worked among economists and finance scholars developing modern asset-pricing theory.
Chicago Board Options Exchange : The Chicago Board Options Exchange, founded in 1973, was the first U.S. exchange dedicated to listed options trading. Its opening coincided with publication of the Black–Scholes paper and expanding demand for option valuation.
Eugene Fama : Eugene Fama is an American economist known for research on asset prices and the efficient-market hypothesis. At the University of Chicago, Fama was among the economists whose market theories shaped Black’s intellectual setting.
Delta hedging : Delta hedging offsets an option’s sensitivity to an underlying asset by holding a corresponding position in that asset. The model’s no-arbitrage argument uses continual portfolio adjustment to remove exposure to stock-price changes.
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