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1. Which of the following is NOT true? A) Risk-neutral valuation assumes that investors are risk neutral B) Options can be valued based on the

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1. Which of the following is NOT true? A) Risk-neutral valuation assumes that 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

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