49 Problem 3. Consider a single-period model with So = (0, 1, ; }) 1 1 1 1 D = 0 1 0 3 1 0 0 0 0 1 0 0 (a) Show that the model is arbitrage-free. 49 Problem 3. Consider a single-period model with So = (0, 1, ; }) 1 1 1 1 D = 0 1 0 3 1 0 0 0 0 1 0 0 (a) Show that the model is arbitrage-free