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There are two states and two securities with associated payments matrix Q = ( 10 2 10 0 ) and the inverse of Q is
There are two states and two securities with associated payments matrix Q = ( 10 2 10 0 ) and the inverse of Q is inv (Q ) = 10 0 . 1 0.5 -0.5 ) The first security costs 9 units of present value. What portfolio of the two securities replicates the Arrow security of the second state? Select one: O a. The portfolio cannot be determined with the information given. b. The second column of inv(Q) O c. The sum of the columns of the Q matrix O d. The second column of Q O e. The sum of the columns of the inv(Q) matrix
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