Consider the model constituted by three securities. The bank account whose price process is A(0) = A(1) = A(2) = 1, and two stocks with the price processes defined by Si(0) = 1.129, S2(0) = 0.83 Si(1) = 0.8 1.5 0.73 for 01 for 02 for 03 0.2 1.25 0.095 for 03 for 01 for 02 S2(1) = 1. Argue using the Fundamental Theorem of assets pricing that the model has arbitrage. 2. Give an arbitrage opportunity for this model. Consider the model constituted by three securities. The bank account whose price process is A(0) = A(1) = A(2) = 1, and two stocks with the price processes defined by Si(0) = 1.129, S2(0) = 0.83 Si(1) = 0.8 1.5 0.73 for 01 for 02 for 03 0.2 1.25 0.095 for 03 for 01 for 02 S2(1) = 1. Argue using the Fundamental Theorem of assets pricing that the model has arbitrage. 2. Give an arbitrage opportunity for this model