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
Correct Answer:
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Q12: For call options the price is positively
Q13: For put options,the price is always positively
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