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Which of the following statements about the Black-Scholes-Merton-(Answered)

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Which of the following statements about the Black-Scholes-Merton model is NOT TRUE?

It assumes that the stock price follows a log-normal distribution.

It assumes that the stock volatility does not change throughout the option?s life.

The model is consistent with put-call-parity.

It assumes that there are transaction costs.

 

Paper#9210134 | Written in 27-Jul-2016

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