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Assume you are constrained to an arbitrage-free market. Consider two assets X,Y in this market whose evolution under a physical measure are driven by the

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Assume you are constrained to an arbitrage-free market. Consider two assets X,Y in this market whose evolution under a physical measure are driven by the same Brownian motion W : dXtdYt1=1Xtdt+1XtdWt=2Ytdt+2YtdWt=2. If 1=22=0.20, and 1=0.10=2, then solve for r. (30 points)

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