Intuitive Proof of Black-Scholes Formula Based on Arbitrage and Properties of Lognormal Distribution
arXiv:physics/0612022
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.
7 pages