Question: a) Explain the Black-Scholes model and its assumptions. b) Check that a share, i.e. V(S,t) = S is a solution of the BlackScholes equation. c)

a) Explain the Black-Scholes model and its assumptions.

b) Check that a share, i.e. V(S,t) = S is a solution of the BlackScholes equation.

c) Derive the Black-Scholes model for Futures Contracts.

d) Write down the pseudocode for getting the value of Binary Call option.

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