In many of the resources I've found in regards to the Black-Scholes Formula, it uses the natural logarithm (ln). However, in the textbook that I am using (by Sheldon Ross), it uses the regular logarithm (log). Everything else is the same, except for that. Needless to say, a different answer results depending on which logarithm form is used. For example, in one problem I've done, if I use the natural logarithm I get a cost of $1.82, but if I use the regular logarithm, I get a cost of $-1.37. Is there a reason why different logarithms are used? If so, what version of the formula should I be using? It seems to matter in the results.

In many of the resources I've found in regards to the Black-Scholes Formula, it uses the natural logarithm (ln). However, in the textbook that I am using (by Sheldon Ross), it uses the regular logarithm (log). Everything else is the same, except for that. Needless to say, a different answer results depending on which logarithm form is used. For example, in one problem I've done, if I use the natural logarithm I get a cost of $1.82, but if I use the regular logarithm, I get a cost of $-1.37. Is there a reason why different logarithms are used? If so, what version of the formula should I be using? It seems to matter in the results.

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter5: Probability: An Introduction To Modeling Uncertainty

Section: Chapter Questions

Problem 26P

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