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Which of the following is not a reason that Black-Scholes option pricing formula won Nobel price? It does not depend on drift rate, hence is
Which of the following is not a reason that Black-Scholes option pricing formula won Nobel price?
- It does not depend on drift rate, hence is independent to investors risk preference
- It can price both European and American options
- Black-Scholes introduces dynamic hedge which completes the market.
- None of the above
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