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State of Nature Next Year Probability of Probability of Stato 2 State 1 60% 40% Payoff in Payoff in Security Price Today State 1 State
State of Nature Next Year Probability of Probability of Stato 2 State 1 60% 40% Payoff in Payoff in Security Price Today State 1 State 2 $2.50 $2.00 $4.00 B $3.00 $6.00 $3.00 $3.50 $10.00 $2.00 Use the prices and payoffs in the table above. Let a be the number of shares of Security A, and let b be the number of shares of Security B. Solve for the number of shares a and number of shares b which produces the same payoffs as Security 0.5 and 1.0 60 and 40 -1.0 and 20 O a-1.5 and b4-20 -2.0 and ba10
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