In the binomial model, show that if (V eq frac{1}{V}left[frac{R-D}{U V-D} V_{1}(1)+frac{U-R}{U-D} V_{0}(1) ight]), there is an
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In the binomial model, show that if \(V eq \frac{1}{V}\left[\frac{R-D}{U V-D} V_{1}(1)+\frac{U-R}{U-D} V_{0}(1)\right]\), there is an arbitrage opportunity.
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