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Consider the market given by the following matrix and price vector: Y = [ 1 0 5 2 0 1 1 1 5 8 ]
Consider the market given by the following matrix and price vector:
Y
Verify that the vector of state prices is compatible with No Arbitrage for somevalues of and specify which values of
Compute the minimum and maximum prices compatible with NA of the call and of the put option on the second asset with strike price
Suppose we introduce in the market a new asset with payos at the price What is the resulting vector of state prices?
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