Some people say that risk-neutral pricing assumes that risky cash flows grow at the risk-free interest rate, and that discounting at the risk-free interest rate violates the most basic logic of the market. Therefore, risk-neutral pricing is purely a digital game for financial engineers, and prices are not indicative. (Although it is estimated that you cannot understand it, "Twenty-Five Lectures on Financial Economics" and Teacher Lin Sha's courseware are better to understand) and answer:

Why is the statement wrong? 

Why can a pricing method that does not consider investors' risk preferences lead to efficient pricing results in a risky world?

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The statement you provided contains some misconceptions about riskneutral pricing Lets address the misconceptions and explain why riskneutral pricing is a valid approach in financial economics 1 Assum... View the full answer