Finance:Frictionless market

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In economic theory a frictionless market is a financial market without transaction costs.[1] 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.[2]

References

  1. ↑ "Frictionless Market - Investopedia". http://www.investopedia.com/terms/f/frictionlessmarket.asp. Retrieved October 14, 2011. 
  2. ↑ Durbin, Michael (2010). All About Derivatives (2 ed.). McGraw-Hill Professional. p. 165. ISBN 978-0-07-174351-8. 



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