## Black-Scholes equation

The second guiding principle in probability theory is more subtle – universality.

**Angus Brown**looks at one of these, a simple model for option pricing, and explains how it takes us on the road to the famous Black-Scholes equation of financial mathematics, which won its discoverers the 1997 Nobel Prize in Economics.

*Plus*about the challenges and rewards of working in an incentive-driven environment.