In the Black-Scholes option pricing model,investors are assumed to be not only rational but also able to do Ito calculus.This model,with its unrealistic assumptions,

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Despite its unrealistic assumptions, the Black-Scholes option pricing model is widely used and respected for its ability to produce accurate predictions in the pricing of options. Its mathematical foundation, despite being complex, provides a reliable framework for financial analysts and traders.

In the Black-Scholes Option Pricing Model,investors Are Assumed to Be