The Law of One Price States That

question 2

Multiple Choice

The law of one price states that

• A) Similar but not identical assets will trade in the same market.
• B) Similar but not identical portfolios will have the same risk.
• C) Portfolios with different cashflows cannot have the same price.
• D) Portfolios with identical cashflows will have the same price.

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Definitions:

Paulina Borghese

A prominent Italian noblewoman, the sister of Napoleon Bonaparte, known for her beauty and the famous sculpture by Antonio Canova depicting her as Venus Victorious.

Neoclassical

An art and architecture style inspired by the classical art and culture of ancient Greece and Rome, emphasizing harmony, clarity, and restraint.

Sublime

An aesthetic quality or state of grandeur and awe, often evoked by art, nature, or literature, that surpasses ordinary beauty or magnificence.

Intellectual Movement

A collective action or trend thought that aims at reforming or revolutionizing the social, political, or cultural aspects of society through ideas and knowledge.