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Financial Mathematics Problem Set 2 Problem 2: A self-funding trading strategy o (in a financial market model) is called Free Lunch if: V 0) =
Financial Mathematics Problem Set 2 Problem 2: A self-funding trading strategy o (in a financial market model) is called Free Lunch if: V 0) = 1 Show that the existence of a free lunch o (a,b) automatically implies the existence of an arbitrage q' = (a',p') = a = Financial Mathematics Problem Set 2 Problem 2: A self-funding trading strategy o (in a financial market model) is called Free Lunch if: V 0) = 1 Show that the existence of a free lunch o (a,b) automatically implies the existence of an arbitrage q' = (a',p') = a =
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