Black-Scholes Equation

Differential equation shave a quantity of applications in various fields of science such as engineering, physics, biology, pharmacokinetics (Liet. al., 2014). Yet, there are only few of their applications in economics or finance. Particularly, well-known models involving differential equations are only economic growth model and Black-Scholes equation. The latter one will be discussed in the paper. In 1977, Myron Scholes together with Fischer Black were awarded a Nobel Prize in economics for the formulation of stock options formula through «new method of determining the value of derivatives» (Jarrow, 1999).