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The Black-Scholes formula is one of the most significant contributions in the field of financial economics and derivative pricing, providing a structured approach to valuing European-style options. Developed by Fischer Black and Myron Scholes in 1973, and further extended by Robert Merton, the model revolutionized the financial markets by offering a mathematical framework that helps determine the fair value of options based on certain assumptions about market behavior. Its importance lies not only in its theoretical foundation but also in its practical application for traders, portfolio managers, and institutions operating in financial markets. At the core of the Black-Scholes model is the assumption that asset prices follow a stochastic process known ____ ______ _______ _______ _______ __________ ___.
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