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NEW QUESTION: 1
The Black-Scholes model assumes near perfect markets for both the options and the underlying stock. Among other conditions, the model assumes the following EXCEPT:
A. The short-term risk-free rate is known and is constant through time
B. There are no commissions or other transaction costs in buying or selling the stock or the option
C. Trading never stops. It is continuous through time following a geometric Brownian motion
D. The stock price does not follow a random walk with a long normal distribution
Answer: D