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Windows in VM instead of dual-booting

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Hi,

I currently dual boot Windows 10 on my laptop (upgraded from Windows 7, which came preinstalled). I only use Windows very rarely, and otherwise use Linux. I am just starting to play with virtualization and was thinking that it would be nice if I could just wipe Windows from my machine and install it in a VM with Linux as the host system instead. I have a Windows 7 product key on my laptop and I've been searching, but I'm having trouble finding a clear answer as to whether I can use this product key to activate Windows 7 in the VM. My questions are:

1) Is it legal to use my preinstalled Windows key for a VM install? From what I've read it seems that it does not violate the EULA, but I'd like to be sure.
2) Will I need to wipe Windows from my hard drive first in order to activate it in the VM?
3) Will I have problems activating it because, being in a VM, it will not be able to recognize that it is running on the OEM hardware?

I apologize if this has been answered already, and thanks for any help.

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