| ▲ | ben_w 2 hours ago | |
Trust is something you can give a price to. The higher the risk of e.g. a loan, the more interest it has to pay out to be worthwhile. The exact amount* is, as I understand it, governed by the Black–Scholes model. * probably with some spherical-cows-in-a-vacuum assumptions given how the misuse of this model was a factor in the global financial crisis. | ||