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The Arrow - Debreu model has three states and three assets: two are risky and one is risk - free. The initial price vector and

The Arrow-Debreu model has three states and three assets: two are risky and one is risk-free. The initial price vector and the payoff matrix are S =[232] and D =[817191666]. Consider a payoff vector x =[3528.530.5].(a) Find a portfolio \phi replicating the given payoff vector: \phi =[](b) Find its initial value: (c) Assuming all states are equilikely, what is the rate of return on this portfolio (as a percentage)?%

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