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4. Arbitrage Recall question 5 from problem set 1: Asset B Asset C 8 State 1 State 2 Price Asset A 6 2 3 WNI

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4. Arbitrage Recall question 5 from problem set 1: Asset B Asset C 8 State 1 State 2 Price Asset A 6 2 3 WNI 2 4 Pc A. Create synthetic Arrow-Debreu securities for each state and find state prices (10 pts) B. Are the prices found in part A consistent with equilibrium? (10 pts) 4. Arbitrage Recall question 5 from problem set 1: Asset B Asset C 8 State 1 State 2 Price Asset A 6 2 3 WNI 2 4 Pc A. Create synthetic Arrow-Debreu securities for each state and find state prices (10 pts) B. Are the prices found in part A consistent with equilibrium? (10 pts)

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