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1. Explain why perfect market timing is equivalent to holding a call option on the stock market. (5p) 2. Assume you can hire an asset

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1. Explain why perfect market timing is equivalent to holding a call option on the stock market. (5p) 2. Assume you can hire an asset manager who is a perfect market timer (and you are sure she is one!). The asset manager's portfolio has a volatility of o. Would you be willing to pay a higher or a lower fee

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