The Black-Scholes Equation $latex \frac{\partial V}{\partial t}+\frac{1}{2}\sigma^2 S^2 \frac{\partial^2 V}{\partial S^2}+rS\frac{\partial V}{\partial S}-rV=0 &s=3$   $latex S$: the price of the stock $latex V=V(S,t)$: the price of a derivative(e.g., option) $latex K$: the strike price of the option $latex r$: the annualized risk-free interest rate $latex \sigma$: the standard deviation of the stock’s return $latex […]