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Question 1 : Consider a binomial model of a two - asset market with corresponding values: A 0 = 1 0 Au = 1 2

Question 1: Consider a binomial model of a two-asset market with corresponding values:
A0=10
Au =12
Ad =8
B0=50
Bu =55
Bd =48
and probability associated with the up state p in (0,1). Does this market admit arbitrage? If yes, construct
an arbitrage portfolio.

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