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The ideal answer is one paragraph long. 1. Consider two possible investment plans: (i) Invest $1 in asset A and cash it next period; (ii)

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The ideal answer is one paragraph long. 1. Consider two possible investment plans: (i) Invest $1 in asset A and cash it next period; (ii) Invest $1 in asset B and earn interest of r dollars over the period. Derive no arbitrage condition. The ideal answer is one paragraph long. 1. Consider two possible investment plans: (i) Invest $1 in asset A and cash it next period; (ii) Invest $1 in asset B and earn interest of r dollars over the period. Derive no arbitrage condition

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