derivatives values are based on risk-neutral prcing

in derivitives •  2 years ago 

Two assets with uncertain returns can be combined in a portfolio that will have a certain payoff.
If a portfolio has a certain payoff, the porfolio should yield the risk-free rate.
For this reason, derivatives values are based on risk-neutral prcing

derivitives riskfreerate payoff riskneutral steem steemit cfa
2 years ago by

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      ·  2 years ago 

    Upvoted! Thank you for supporting witness @jswit.

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