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Problem 1. Consider an one period model with three states and two assets, a risk-free bond B and a stock. Suppose that Bo = 100,

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Problem 1. Consider an one period model with three states and two assets, a risk-free bond B and a stock. Suppose that Bo = 100, BT = 105, S. 10 and ST (8, 9, 12). Consider a call-option on the stock with exercise price K = 10. Find all the possible arbitrage-free prices for the call option

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