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Frictionless market
In
economic theory
a
frictionless market
is a
financial market
without
transaction costs
. Friction is a type of
market incompleteness
. Every
complete market
is frictionless, but the converse does not hold. In a frictionless market the
solvency cone
is the
halfspace
normal to the unique price vector. The
Black-Scholes model
assumes a frictionless market.
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