Suppose we want to value Asset A with the following future cash flow stream: Year 0 Year 1 Year 2 Year 3 -Pa 100 150 300

We also observe the market prices and cash flow streams of Assets B, C, and D: 0 1 2 3 B -270 $300

C -320 $300 D -370 $150

What is the Price of Asset A according to the arbitrage approach to asset valuation?

1.2 Suppose instead that the cash flow streams are as follows:

t = 0 1 2 3

B -$270 $300

C -$320 $100 $300

D -$370 $50 $300 $150

What is the price of Asset A in this case? (Hint: begin the analysis from period 3)