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State the assumptions of the capm mm propositions and the

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Reference no: EM13567543

Please read the attached article and answer the following questions:

Fischer Black

The Journal of Finance, Vol. 41, No. 3, Papers and Proceedings of the Forty-Fourth Annual

Meeting of the America Finance Association, New York, New York, December 28-30, 1985. (Jul., 1986), pp. 529-543.

Stable URL:
https://links.jstor.org/sici?sici=0022-1082%28198607%2941%3A3%3C529%3AN%3E2.0.CO%3B2-9

1. State the assumptions of the CAPM, MM Propositions, and the BS-Option Pricing Model.

2. Discuss these assumptions in the context of "Noise" as described by Fischer Black. In particular, discuss market efficiency and the rationality of individuals. Black's section on financial markets is most critical.

Please limit your write-up to two pages double-spaced.

Reference no: EM13567543

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