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Suppose the state of nature is summarized by the value of the market portfolio which has a discrete probability distribution with possible values of: [$1.

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Suppose the state of nature is summarized by the value of the market portfolio which has a discrete probability distribution with possible values of: [$1. $2, $3, $4]. A range of put options with different strike prices are available on the market portfolio and their prices are given below: Put Strike Put Prices 2 $0.1 3 $0.6 $1.2 5 $2.1 Using the above information to answer Questions 13 - 16 Calculate the price of the Arrow-Debreu security that pays $1 in the state where the value of the market portfolio is equa to $2. Question 14 Continue with the above, what is the risk neutral probability of this state? Pls round your number to the third decimal, e.g.. 0.123. Question 15 What is the price of a riskless bond that pays $2 in each state? Question 16 Consider an exotic asset that pays the square of the value of the market portfolio, what is the price of this exotic asset? Suppose the state of nature is summarized by the value of the market portfolio which has a discrete probability distribution with possible values of: [$1. $2, $3, $4]. A range of put options with different strike prices are available on the market portfolio and their prices are given below: Put Strike Put Prices 2 $0.1 3 $0.6 $1.2 5 $2.1 Using the above information to answer Questions 13 - 16 Calculate the price of the Arrow-Debreu security that pays $1 in the state where the value of the market portfolio is equa to $2. Question 14 Continue with the above, what is the risk neutral probability of this state? Pls round your number to the third decimal, e.g.. 0.123. Question 15 What is the price of a riskless bond that pays $2 in each state? Question 16 Consider an exotic asset that pays the square of the value of the market portfolio, what is the price of this exotic asset

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