4. (10 marks) Suppose there are two possible states of the economy in one year: Good or Bad and both are equally likely (i.e. each occurs with probability 1/2 ). There are three securities that trade today: A,B, and C. Security A has a price of $200 today and pays off $840 in one year in a bad economy and $0 in one year in a good economy. Security B has a price of $600 today and pays off $0 in a bad economy and $840 in a good oconomy. Finally, socurity C pays off $840 in a bad economy and $4200 in a good econorny but its price today is unknown. (i) What is the risk-free rate? (ii) Using the Law of One Price, what should the price of security C be today? (iii) If the riak-premium of security C is 25% then what is the price of security C today