Which of the Following Statements Is Correct

question 4

Multiple Choice

Which of the following statements is correct?

• A)Risk neutral refers to the state of ignoring the risk involved in determining expected rates of return.
• B)Risk neutral pricing uses the cost of capital to discount the future cash flows of the option.
• C)Risk-neutral pricing ignores the probability of state in pricing the option.
• D)b and c

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Definitions:

Psychopathic

Pertaining to psychopathy, a personality disorder characterized by persistent antisocial behavior, impaired empathy and remorse, and bold, disinhibited, and egotistical traits.

Undercontrolled

Describing individuals who lack self-regulation and the ability to control impulses and behaviors.

Borderline

Typically refers to being on the dividing line or the threshold between two different states or conditions, often used in medical or psychological contexts.

Narcissism

A personality trait characterized by excessive self-love or selfishness, often at the expense of others' feelings.