WHy is the BSM model more interested in the volaility of stock return vs. the volaility of the stock price?
Because that’s how Messrs. Black, Scholes, and Merton set up their partial differential equation.
WHy is the BSM model more interested in the volaility of stock return vs. the volaility of the stock price?
Because that’s how Messrs. Black, Scholes, and Merton set up their partial differential equation.