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Intuitive Proof of Black-Scholes Formula Based on Arbitrage and Properties of Lognormal Distribution

Alexei Krouglov
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Abstract

Presented is intuitive proof of Black-Scholes formula for European call options, which is based on arbitrage and properties of lognormal distribution. Paper can help students and non-mathematicians to better understand economic concepts behind one of the biggest achievements in modern financial theory.

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Alexei Krouglov. 2006-12-03. Intuitive Proof of Black-Scholes Formula Based on Arbitrage and Properties of Lognormal Distribution. https://arxiv.org/abs/physics/0612022

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