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How are prices being set on stock markets? For your explanation, start by (i) stating the optimization principle that reflects the pricing criteria, then (ii)

How are prices being set on stock markets? For your explanation, start by (i) stating the optimization principle that reflects the pricing criteria, then (ii) provide your own (!) example of a pricing calculation. Further, (iii) please explain under which circumstances the method you have described is fair, and under which circumstances it would not work well to define a fair price.

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