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Folding Hand #1 without a fight is ridiculous. Hero shouldn't give any free cards, for that matter. Bet the turn, fold to a raise.

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It's a small pot. Based on his reads the raise means that the passive player has top pair or better. It would help a lot if I knew whether the passive player raises big aces preflop. If he doesn't it is a clear fold, if he does then maybe we can think about it a little more.