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Risk neutral pricing only works when people dont care about risk. For this reason, risk neutral pricing only gives an approximation of actual prices. (True
Risk neutral pricing only works when people dont care about risk. For this reason, risk neutral pricing only gives an approximation of actual prices. (True or False)
A stock with a dividend yield of 2% currently trade for $100. The risk-free rate is 5%. The risk neutral expected value of the stock after one year is approximately $107. (True or False)
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