The Black and Scholes Option Pricing Model Makes an Assumption

question 2

True/False

The Black and Scholes option pricing model makes an assumption that markets have normal friction.

---

Definitions:

Kinship

The system of social relationships that form an integral part of the lives of most humans in most societies, including relationships derived through descent and marriage.

State

A political institution established to manage and defend a complex, socially stratified society occupying a defined territory. It is organized and directed by a government that has the capacity to make rules, impose order, tax its subjects, and use military force to defend or expand its territories.

Territorial State

A state that exercises sovereignty over a defined geographical territory and the people within it, with recognized borders.

Ethnic Groups

Collectives of people who share a common identity based on factors like culture, language, ancestry, or national origin.