The Black-Scholes Model is a mathematical formula used to calculate the theoretical price of options, which are financial contracts that give the holder the right to buy or sell an asset at a predetermined price. Developed by Fischer Black, Myron Scholes, and Robert Merton in the early 1970s, this model helps investors assess the value of options based on various factors, including the current price of the underlying asset, the strike price, time until expiration, risk-free interest rate, and volatility. The model assumes that the price of the underlying asset follows a Geometric Brownian Motion, which means it moves in a random manner with a constant drift and volatility. By providing a systematic way to evaluate options, the Black-Scholes Model has become a cornerstone of modern financial theory and is widely used by traders and financial analysts to make informed investment decisions.