suppose that the asset prices are 28 18 and 47 respectively is there an arbitrage op 620206
Assume a finite state economy with three assets whose payoff matrix is given by
|
X = |
$30 |
$20 |
$50 |
|
$20 |
$15 |
$35 |
Suppose that the asset prices are $28, $18, and $47, respectively. Is there an arbitrage opportunity in the market?
- If the price of the third asset reduces to $46, is there an arbitrage opportunity in the market?