Model And Its Application Of Black-Scholes Stochastic Differential Equations

Stochastic differential equations model has very important theoretical significance and extensive application background.In 1973,Fischer Black and Myron Scholes derived the representative Black-Scholes stochastic partial differential equations in virtue of the theory of stochastic differential equations combined with the risk-free investment theory,and derived the European call(put)option price calculation formula by means of the corresponding boundary conditions and probability methods.The stock market is a complex nonlinear dynamic system,affected by the interaction of many factors,for accurate prediction of future price is very difficult,but for some degree of short-term forecast relatively simple,but also for investors' investment behavior has very important significance.This paper mainly studies the nature of the stochastic differential equations corresponding with the stock price model of Black-Scholes model,through the parameter estimation of such stochastic differential equation method,the geometric Brownian motion model corresponding with the actual stock data is established,predict stock price movements,make the simulation curves of shares and calculate error,by comparing the error to illustrate the GBM model's applicable conditions in China's stock market.