Question
The Black-Scholes model is used for the pricing
of:Solution
An option pricing model is a mathematical tool used to calculate the theoretical or fair value of an option contract. Popular models like Black-Scholes and the binomial model use variables such as the underlying asset's price, strike price, volatility, time to expiration, and risk-free interest rate to help traders make informed decisions and manage risk.  The Black-Scholes model is a mathematical equation that's used for pricing options contracts. It's based on time value and intrinsic value of the option.
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