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Suppose the initial price of a stock is 100 and the price after one period is either 200, 100, or 50. At a cost of

Suppose the initial price of a stock is 100 and the price after one period is either 200, 100, or 50. At a cost of C per share, we can purchase at time 0 the option to buy the stock at time 1 for the price of 150. Use the arbitrage theorem to find an interval for which there is no arbitrage if C lies in that interval.

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