问题如下：
Most derivatives are priced by:
选项：
A. assuming that the market offers arbitrage opportunities.
B. discounting the expected payoff of the derivative at the risk- free rate.
C. applying a risk premium to the expected payoff of the derivative and its risk.
解释：
B is correct. Virtually all derivative pricing models discount the expected payoff of the derivative at the risk- free rate.
A is incorrect because derivatives are priced by assuming that the market is free of arbitrage opportunities via the principle of no arbitrage, not by assuming that the market offers them.
C is incorrect because the application of a risk premium to the expected payoff of the derivative and its risk is not appropriate in the pricing of derivatives. An investor’s risk premium is not relevant to pricing a derivative. 7
需要解释所有选项，没有掌握这块内容
