7. Consider a single-period model with 4 states and 3 risky assets (apart from the risk-free asset). Write 1={w1, 62, 63, 64}. Assume that (5))osis3 = [1 1.7 1.8 2] and i 1 3 1 1 2 3 3 (sw)isis4,05;53 = 1 2 1 1 1 1 1 3 (Here the column index j runs from 0 to 3.) (a) Show that the model is arbitrage-free and complete. (b) Consider the contingent claim (CW)isis4= Find the no-arbitrage price of C at time 0 and find a replicating portfolio. Is the replicating portfolio unique? 7. Consider a single-period model with 4 states and 3 risky assets (apart from the risk-free asset). Write 1={w1, 62, 63, 64}. Assume that (5))osis3 = [1 1.7 1.8 2] and i 1 3 1 1 2 3 3 (sw)isis4,05;53 = 1 2 1 1 1 1 1 3 (Here the column index j runs from 0 to 3.) (a) Show that the model is arbitrage-free and complete. (b) Consider the contingent claim (CW)isis4= Find the no-arbitrage price of C at time 0 and find a replicating portfolio. Is the replicating portfolio unique