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Show that the one period, trinomial market with 2 assets in the trinomial model is complete. In particular, we can imagine a market with 2
Show that the one period, trinomial market with 2 assets in the trinomial model is complete. In particular, we can imagine a market with 2 underlying assets S1 , S2 . They can go up, stay neutral or go down at time T. Specifically, there are 3 possible outcomes for
What conditions do you need for this conclusion?
What condition do you need for the market to be arbitrage free?
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