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b) Suppose the capital market is complete. Only two states are possible and there exist two assets with pay-off that are linear independent. The implied

b) Suppose the capital market is complete. Only two states are possible and there exist two assets with pay-off that are linear independent. The implied two Arrow-Debreu securities prices are p = 0.45 and p2 = 0.5. The (physical) probability for the upstate or downstate is 50% respectively. Calculate the risk-free return and the risk-neutralized probabilities for the up- and downstate

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