Multiple Choice
Which of the following is NOT true?
A) Risk-neutral valuation provides prices that are only correct in a world where investors are risk-neutral
B) Options can be valued based on the assumption that investors are risk neutral
C) In risk-neutral valuation the expected return on all investment assets is set equal to the risk-free rate
D) In risk-neutral valuation the risk-free rate is used to discount expected cash flows
Correct Answer:
Verified
Correct Answer:
Verified
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