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Assumptions of the CAPM, MM Propositions, and the BS-Option Pricing Model

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1. State the assumptions of the CAPM, MM Propositions, and the BS-Option Pricing Model.

2. Discuss these assumptions in the context of “Noise” as described by Fischer Black. In particular, discuss market efficiency and the rationality of individuals. Black’s section on financial markets is most critical.

Please limit your write-up to two pages double-spaced.

Additional Files:

Noise-better.pdf

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1. State the assumptions of the CAPM, MM Propositions, and the BS-Option Pricing Model.

2. Discuss these assumptions in the context of “Noise” as described by Fischer Black. In particular, discuss market efficiency and the rationality of individuals. Black’s section on financial markets is most critical.

Please limit your write-up to two pages double-spaced.

Additional Files:

Noise-better.pdf

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