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Black-Scholes-Merton Model

 

HedgeBlack-Scholes-Merton model is a very popular financial model to calculate the price of options.It made the options very popular among the american and European investors. This formula can be applied only to the financial markets containing specific type of derivative securities.

 

According to the market analysts,the prices calculated through Black-Shcoles are most of the time close to the actual prices.This model is very useful to reduce the risk ,while hedging the options.

 

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