using the - Black Scholes Model - formual ,find the call option and put option

find equation call and put option from BSM

by use BSM equation , find equation for ( call option and put option)

Black-Scholes Model This gives dII of 1 of +-oS at 2 as2 No arbitrage principle: the return from this d II portfolio must be rdt; = rdt, or, d II = r II dt IT So of 1 F Idt = rf S 2 as? as + 092027 at 01 of 1 at 2 + +7S as? = rf as This the Black-Scholes model. Black Scholes equation: boundary conditions Boundary conditions are applied for S=0 and S > Boundary conditions for a call option: C(0,t)=0 and C(S, t) + S, as, S 00, C (S, T ) = max( S - K ,0) The call option is likely to be exercised as S 700 Boundary conditions for a put option: P(0,t) = Ke=(T-1), P(S,1) 0,as, S >00 P(S,T) = max( K -5,0) As the stock price S00, then the put option is unlikely to be exercised. I Black-Scholes Model This gives dII of 1 of +-oS at 2 as2 No arbitrage principle: the return from this d II portfolio must be rdt; = rdt, or, d II = r II dt IT So of 1 F Idt = rf S 2 as? as + 092027 at 01 of 1 at 2 + +7S as? = rf as This the Black-Scholes model. Black Scholes equation: boundary conditions Boundary conditions are applied for S=0 and S > Boundary conditions for a call option: C(0,t)=0 and C(S, t) + S, as, S 00, C (S, T ) = max( S - K ,0) The call option is likely to be exercised as S 700 Boundary conditions for a put option: P(0,t) = Ke=(T-1), P(S,1) 0,as, S >00 P(S,T) = max( K -5,0) As the stock price S00, then the put option is unlikely to be exercised