Which of the Following Are NOT True

question 11

Multiple Choice

Which of the following are NOT true

• A) Risk-neutral valuation and no-arbitrage arguments give the same option prices
• B) Risk-neutral valuation involves assuming that the expected return is the risk-free rate and then discounting expected payoffs at the risk-free rate
• C) A hedge set up to value an option does not need to be changed
• D) All of the above

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Definitions:

Neural Firing

The process by which a neuron sends an electrical signal across a synapse to another neuron.

Dreams

A series of thoughts, images, and sensations occurring in a person’s mind during sleep.

Rotating Shift Work

A work scheduling system in which employees change their work hours or shifts regularly, often seen in 24-hour operation sectors.

Circadian Cycle

A roughly 24-hour cycle in the physiological processes of living beings, including humans, influencing sleep-wake patterns, hormone release, and other bodily functions.