2) Assume that there are two possible future states of the economy: weak and strong. Two securities, A and B iialble are available for trading. Prices (at t-0) and future payoffs (at t-1) in both states are given in the following Price () at t-0 30.76 84.67 weak state 0 Strong state 200 0 1 Assume that both states are equally likely (50% chance of each). Answer the following questions a. There is another security, call it C, whose payoff at t-1 is equal to $200 in the weak state and $400 in the strong state. Find the no-arbitrage price (at t-0) of security C. (1 mark) b. What is the risk-free rate of return in this economy? (2 marks) (Hint: what makes something risk-free? Can you create a portfolio that is risk-free?) C. Find expected rate of return and expected risk premium for security C from part a. (2 marks)