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    Derivative Securities
  4. Exam
    Exam 17: Single-Period Binomial Model
  5. Question
    The Following Is NOT an Assumption Underlying the Binomial Option
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The Following Is NOT an Assumption Underlying the Binomial Option

Question 2

Question 2

Multiple Choice

The following is NOT an assumption underlying the binomial option pricing model:


A) no market frictions
B) no credit risk
C) competitive and well-functioning markets
D) no interest rate uncertainty
E) stock prices follow a lognormal process

Correct Answer:

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