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a. Security C has the same payoffs as what portfolio of the securities A and B ? b. Security D has the same payoffs as
a. Security C has the same payoffs as what portfolio of the securities A and B ? b. Security D has the same payoffs as what portfolio of the securities A and B ? c. What is the no-arbitrage price of security C ? d. What is the no-arbitrage price of security D ? e. What is the expected return of security C if both states are equally likely? What is its risk premium? f. What is the expected return of security D if both states are equally likely? What is its risk premium? g. What is the difference between the return of security C when the economy is strong and when it is weak? h. If security C had a risk premium of 10.5%, what arbitrage opportunity would be available? i. What is the difference between the return of security D when the economy is strong and when it is weak? j. If security D had a risk premium of 10.5%, what arbitrage opportunity would be available? a. Security C has the same payoffs as what portfolio of the securities A and B ? b. Security D has the same payoffs as what portfolio of the securities A and B ? c. What is the no-arbitrage price of security C ? d. What is the no-arbitrage price of security D ? e. What is the expected return of security C if both states are equally likely? What is its risk premium? f. What is the expected return of security D if both states are equally likely? What is its risk premium? g. What is the difference between the return of security C when the economy is strong and when it is weak? h. If security C had a risk premium of 10.5%, what arbitrage opportunity would be available? i. What is the difference between the return of security D when the economy is strong and when it is weak? j. If security D had a risk premium of 10.5%, what arbitrage opportunity would be available
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