24. Consider non-dividend paying assets A and B. The asset prices one year from now will depend on the state of economy as follows: Asset price in one year Boom Recession 50 20 30 30 asset A asset B Currently asset A sells for $15 and asset B sells for $27. Which of the following strategies results in an arbitrage? (a) buy 1 unit of asset A and sell 0.6 unit of asset B (b) sell 1 unit of asset A and buy 0.5 unit of asset B (c) sell 2 unit of asset A and buy 1.2 unit of asset B (d) None of the above leads to an arbitrage 25. Consider non-dividend paying stocks A and B. The current stock prices in time 0 are $45 for A and $32 for B. The stock prices two years from now depend on the state of economy as follows: Stock price in two years Boom Recession 80 40 stock A stock B 30 40 What is the 2-year risk-free interest rate per annum? (a) 4.48% (b) 7.25% (c) 14.38% (d) 14.50%