3.3. Model DevelopmentLiterature review from the previous sections supports that the Black-Scholes model is feasible as dealing with the pricing function which is an interdisciplinary application of the formula. Applying Black-Scholes Model to illustrate the trend of housing price for a metro area fits the need of this study. Assuming that the real estate market consists of at least one risky asset and one riskless asset, we have:1. Riskless rate which is the rate of return on the riskless asset and is so called the risk-free interest rate, and2. Random walk which is the instantaneous log returns of the asset price as well as an infinitesimal random walk with drift. The random walk is a geometric Brownian motion, and