The BlackScholes formula is perhaps the most frequently used formula with embedded probabilities in human history. It shows how six variables  the current underlying asset price (S), the option strike price (K), the option timetoexpiration (t), the riskless return (r), the underlying asset payout return (d), and the underlying asset volatility (s)  work together to determine the value of a standard option.
Fischer Black and Myron Scholes worked together at MIT in the late 1960’s and early 1970’s to solve the problem of option valuation. They looked at it from two angles. First, they used an equilibrium model (the capital asset pricing model); second, they used a hedging argument proposed by their colleague Robert Merton, who had also been working on the problem with Paul Samuelson. Both approaches led to the same differential equation, known from physics as the 'heat equation'. Its solution is the formula that has since then borne their names.
 
 
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Prof. Fischer Black (1938  1995)
1973  Published "The Pricing of Options and Corporate Liabilities"
1984  left MIT to work for Goldman Sachs & Co.
 
Prof. Myron Scholes
1973  Published "The Pricing of Options and Corporate Liabilities"
1997 Nobel Laureate in Economics for a new method to determine the value of derivatives
Currently works in the derivatives trading group at Salomon Brothers
 
Prof. Robert Merton
1997 Nobel Laureate in Economics for for a new method to determine the value of derivatives

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