Papers on "The Black-Scholes Formula" and similar term paper topics

Paper #059875 :: The Black-Scholes Formula
Buy and instantly download this paper now

An assessment of the impact of the stock-option plan set forth by Robert C. Merton and Myron S. Scholes.

Written in 2005; 3,000 words; 9 sources; APA; $ 88.95

Paper Summary:

While the Financial Accounting Standards Board has favored expensing stock options since the mid-1990s, it has continued to allow businesses to recognize the expense in footnotes to financial statements as an alternate reporting method. Recent publicity around accounting fraud, executive abuses, "cooking the books," and other questionable business ethics has focused increasing attention on stock option plans in the United States. Prior to the introduction of the Black-Scholes formula, options investors determined a risk premium to hedge against major financial losses. According to the Black-Scholes formula, risk premiums are not necessary for investment in stock options because such premiums are already factored into the prices of stocks. This paper provides an overview of how the Black-Scholes formula can be used to help investors better understand the forces at play in making decisions about stock options, followed by a summary of the research in the conclusion.

From the Paper:

"While Merton's research covered many areas of finance theory and economics, his innovations in option valuation has perhaps been his most influential to date (Bernstein, 2000). Prior to 1973, when Black and Scholes published their precedent-making formula, determining the value of stock options was considered extremely risky and highly difficult because of the nature of options, which are essentially agreements that give investors the right to either buy or sell an asset at some fixed time in the future (Crum & Goldberg, 1998)."

Tags: call option economics premium

More papers on "The Black-Scholes Formula"

1. Paper #068968 :: Financial Derivatives ( 3,040 words; 6 sources; MLA )
2. Paper #105640 :: World Formula One Championships ( 1,670 words; 12 sources; MLA )
3. Paper #040232 :: Formula One Racing ( 1,400 words; 6 sources; )
4. Paper #050297 :: The Nestle Baby Formula Controversy ( 936 words; 3 sources; MLA )
5. Paper #011181 :: Empirical Formula ( 1,000 words; APA )

About AcaDemon

We have thousands of high-quality term papers, research papers, essays, book reports and dissertations on every topic. At AcaDemon, you can download those term papers to help you write yours! You can be sure that the term paper, essay, book report or research paper, you download are top-quality, competitively priced and high-level work.

Look for more research papers, essays and book reports on The Black-Scholes Formula

This Free Term Paper Abstract is a part of our Term Paper Library. Here you can purchase research papers, examples of essays, academic dissertations, articles, notes, analytical papers, book reports, stories and poems. We have thousands of persuasive, point-of-view, narrative, critical, compare and contrast and other types of essays in our Library. You can also find here Term papers on "The Black-Scholes Formula", Essays on "The Black-Scholes Formula", Research papers on "The Black-Scholes Formula", Student papers on "The Black-Scholes Formula", Book reports on "The Black-Scholes Formula", Dissertation on "The Black-Scholes Formula", Thesis on "The Black-Scholes Formula", Summary of paper on "The Black-Scholes Formula", Articles written on "The Black-Scholes Formula".