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Black Scholes Turns 50

Alpha Exchange

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The Law of One Price and the Black and Sholes Model

The Black and Sholes model is tied together by this wonderful acronym called LUP, the Law of One Price. The rule of 11 tells us that the next giant market crisis will not arrive until 2031. But differently, there is no free money to be had at markets. There are no opportunities for riskless arbitrage in the world of theoretical finance.

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