medium · Quantitative Finance derivatives
According to the Fundamental Theorems of Asset Pricing, what is the condition for a market to be 'complete'?
- All assets in the market must follow Gaussian distributions.
- There must be at least one risk-neutral measure mathbbQ that is equivalent to the physical measure mathbbP.
- There must be no transaction costs and the risk-free rate must be constant.
- The risk-neutral measure mathbbQ must be unique.
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