How can the Black-Scholes formula not include the expected return on the stock?
Question:
How can the Black-Scholes formula not include the expected return on the stock?
Expected ReturnThe expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0321818171
2nd Canadian edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Question Posted: