Neither Black nor Scholes knew the mathematical theory needed to do calculus rigorously in a stochastic environment, but the Capital Asset Pricing Model provided an economic justification for what might otherwise have seemed dangerously unrigorous mathematics. "We did not know whether our formulation was exact," says Scholes, "but intuitively we thought investors could diversify away any residual risk that was left."

Donald MacKenzie, An Engine, Not a Camera, loc. 586