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The Most Correct Method to Determine the Current Value of Future

Question 21

Multiple Choice

The most correct method to determine the current value of future payoffs would be to:


A) take the discounted expected value at the risk-free rate.
B) take the expected value using the probabilities.
C) take the discounted expected value using the risk-neutral probabilities and the risk free rate.
D) sum the payoffs discounted at the risk free rate.
E) None of the above.

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