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. There are two possible future states. State 1 in which the COVID19 vaccine is a failure, and state 2 in which the vaccine succeeds.

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. There are two possible future states. State 1 in which the COVID19 vaccine is a failure, and state 2 in which the vaccine succeeds. The probability of each state is 0.5. The following table contains the current prices of Zoom and United as well as their possible prices in the two future states. Assume no arbitrage. [25 points total, 5 points each part] Possible prices Stock Price State 1 State 2 m United $35 $28 $52 Pzer $36 $72 (a) What is the price of a security that pays $1 in state 1 and $0 in state 2. (b) What is the price of a security that pays $0 in state 1 and $1 in state 2. (c) What is the price of a riskless asset that pays $1 in both states? (d) What are the realized values of the stochastic discount factor in states 1 and 2? (9) Use you answer from part (d) to compute the price of Pzer stock

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