Which of the following statements is not true about the law of one price
A)investors prefer more wealth to less
B)investments that offer the same return in all states must pay the risk-free rate
C)if two investment opportunities offer equivalent outcomes,they must have the same price
D)investors are risk neutral
E)none of the above

Question

Quizplus · Accepted Answer

None of the above statements are not true about the law of one price as they are all accurate descriptions of the law. However, if we had to choose one that is not strictly true, it would be D because investors can have varying levels of risk aversion, not necessarily being completely risk neutral.

Which of the Following Statements Is Not True About the Law