What option pricing model calculates theoretical financial options valuation using stock price, strike price, risk-free rate, volatility, and expiration time?

Explanation

* The Black-Scholes Model values European-style call and put options based on continuous time dynamics.
* Key parameters: Current stock price, strike price, risk-free interest rate, time to expiration, and asset volatility.
* Assumes lognormal distribution of stock returns and constant volatility.