(a) Consider a stock whose required return is higher than the risk-free return. Then, in a binomial tree, the real probability of an increase in the price is higher than the risk-neutral probability of the increase. (TRUE / FALSE )

(b) In the risk-neutral valuation, we penalize risk by changing the probability. ( TRUE / FALSE )

(c) By setting u = et and d = e

t in a binomial tree, we can make the stock return required by risk-averse investors the same as the risk-free return. ( TRUE / FALSE )