
This paper follows up a discussion in the authors previous work on Louis Bachelier, examining the Black Scholes Merton model and reviewing the Payoff, Profit and Value of the option contract so defined. The paper in doing so addresses the contention that a perfect hedge can be achieved finding this is not achieved. The paper outlines in doing so a series of pricing anomalies that arise from the perfect hedge and risk free create adoption in the model.
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