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2 Consider two assets: ri = ( 3 ), na = (*) r2 = If the asset prices are qi - 1, q2 = 2

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2 Consider two assets: ri = ( 3 ), na = (*) r2 = If the asset prices are qi - 1, q2 = 2 7 (1+a) respectively, does the price of an asset with returns in the two states respectively, q = = 1 a satisfy the no arbitrage property? (Record your answer as 'True' (=yes) or 'False' (=no). 2 Consider two assets: ri = ( 3 ), na = (*) r2 = If the asset prices are qi - 1, q2 = 2 7 (1+a) respectively, does the price of an asset with returns in the two states respectively, q = = 1 a satisfy the no arbitrage property? (Record your answer as 'True' (=yes) or 'False' (=no)

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