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What Does the Black and Scholes Option Pricing Model Mean

Question 15

Multiple Choice

What does the Black and Scholes Option Pricing model mean by "markets are frictionless"?


A) There are no taxes
B) There are no transactions costs
C) All securities are infinitely divisible
D) All market participants may borrow or lend at the known constant riskless rate of interest
E) All of the above are correct

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