[Verse 1] Picture two worlds where assets trade One with worry, one unafraid In the fearful realm, we discount deep Higher rates for the risks we keep But there's another way to see Same result, more clarity [Chorus] Risk-neutral, risk-neutral Twist the odds, keep rates simple Risk-free discount, probabilities dance Risk-neutral valuation, give math a chance Adjust the chances, not the rate Same fair value, cleaner slate [Verse 2] Take a stock that might soar or crash Nervous investors demand more cash Fifty-fifty seems too bright When failure keeps you up at night So we dim those rosy odds While the risk-free rate just nods [Chorus] Risk-neutral, risk-neutral Twist the odds, keep rates simple Risk-free discount, probabilities dance Risk-neutral valuation, give math a chance Adjust the chances, not the rate Same fair value, cleaner slate [Bridge] Expected value stays the same Whether you play the discount game Or bend probabilities to fit The math will prove they're equivalent Cleaner formulas emerge When artificial worlds converge [Verse 3] Derivatives and options too Love this method, tried and true Black-Scholes whispers in your ear "Pretend that no one feels the fear" Calculate what price should be In this brave new fantasy [Chorus] Risk-neutral, risk-neutral Twist the odds, keep rates simple Risk-free discount, probabilities dance Risk-neutral valuation, give math a chance Adjust the chances, not the rate Same fair value, cleaner slate [Outro] Two roads lead to the same address One through worry, one through chess Moving pieces on the board Where probability's the sword
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