Which of the following about rainbow options is not correct?

It is difficult to value rainbow options because the number of nodes in the binomial tree grows exponentially with the number of risky variables.

Although the Black-Scholes formulas cannot be used to value a rainbow option, the risk-neutral valuation approach can.

An option to exchange one asset for another is an example of rainbow options.

A rainbow option's payoff can be replicated by using the underlying assets and bonds.