BSOPMBlack Scholes Option Pricing Model
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We try rerunning all tests allowing for negative implied subjective values assuming that [alpha] is simply [alpha] = BSOPM/(Salary + Bonus + Other + BSOPM) where BSOPM is the Black-Scholes value of the options.
We repeat all of the tests using the arithmetic difference Sub - BSOPM.
BSOPM is the options value calculated using Black- Scholes and a is the proportion of total wealth held in illiquid firm- specific holdings.