Problem 2 (12 points) Market Price ash flow in One Ye Poor Economy Security Today Good Economy 250 550 40 1680 520 The likelihood of being in a poor economy or in a good a) (4 points) Based upon the information provided about securities A, B, and C, what is the risk-free rate of interest? a(4 points) What is the no-arbitrage price for security C is? o (4 points) Assume that security C has a risk premium of 30%, what is its price that may allow for arbitrages? 4) (4 points) Assume that security C has a risk premium of 30%. What arbitrage opportunity exists and how would you exploit it