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Problem 3: Consider the following model with three securities S1,S2 and S3, and three scenarios, 1,2 and 3 such that P(1)=P(3)=P(2)/2=0.25. S1(0)=7;S1(1)=40for10for2,20for3S2(0)=31;S2(1)=6040100for1for2for3S3(0)=60;S3(1)=120for175for2180for3 Calculate the matrix
Problem 3: Consider the following model with three securities S1,S2 and S3, and three scenarios, 1,2 and 3 such that P(1)=P(3)=P(2)/2=0.25. S1(0)=7;S1(1)=40for10for2,20for3S2(0)=31;S2(1)=6040100for1for2for3S3(0)=60;S3(1)=120for175for2180for3 Calculate the matrix C and the vector m for this model
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