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If There Is to Be No Arbitrage Possibility, Which of the Following

question 12

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If there is to be no arbitrage possibility, which of the following is a requirement for the price of an option?


Definitions:

Population Variance

A measure of the dispersion of a set of data points in a population, calculated as the average of the squared distances of each data point from the population mean.

Unbiased Estimator

A statistical estimator that, when applied repeatedly to numerous samples, gives correct parameter values on average.

Consistent Estimator

A statistical property where an estimator approaches the true parameter value as the sample size increases indefinitely.

Population Parameter

A value that represents a characteristic of an entire population.

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