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Question 17 (10 points) Which assumption is not required in the Black-Scholes option pricing model? 1) The continuous risk-free rate is constant and known 2)

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Question 17 (10 points) Which assumption is not required in the Black-Scholes option pricing model? 1) The continuous risk-free rate is constant and known 2) The price of the underlying asset follows a log-normal distribution 3) Markets are frictionless 4) The underlying asset has no cash flow 5) The options valued are American options

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