No dividends or cash flows are generated by the underlying asset

This means that this model is only accurate if the underlying stock does not pay any dividends. Many stocks do pay dividends, and therefore, the model should be modified for such stocks, due to the fact that it would be preferable to own the underlying stock when dividends are paid, as opposed to merely owning the right to purchase options and not receiving the dividend payment. In the interest of this project, only stocks which do not pay dividends will be used for testing.