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Riskneutrality, also known as risk-neutral pricing, is a concept in finance and economics that assumes investors are indifferent to risk. This means that they do not prefer riskier investments over less risky ones, and thus, they require the same expected return for both. The principle is widely used in the pricing of financial derivatives and options.

In a risk-neutral world, the expected value of a portfolio's return is the same as the actual return, regardless of the underlying risks. This is in contrast to a real-world scenario where investors typically require a higher return for taking on more risk. The risk-neutral approach allows for the simplification of complex financial models by eliminating the need to account for investor preferences towards risk.

The concept of risk-neutrality is fundamental in the Black-Scholes model, which is used to price options and other derivatives. The model assumes that the price of an asset follows a geometric Brownian motion under a risk-neutral measure. This assumption allows for the derivation of a closed-form solution for the price of an option, making it a cornerstone in financial mathematics.

Risk-neutrality is a theoretical construct that provides a useful framework for pricing and hedging financial instruments. However, it is important to note that real-world investors are not truly risk-neutral and their preferences towards risk can significantly impact investment decisions and outcomes. Therefore, while risk-neutral pricing is a valuable tool in financial analysis, it should be used in conjunction with other methods that account for the behavior of actual investors.