Define the pricing functional F(x) on the asset span S by F(x) = {y : y =
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Define the pricing functional F(x) on the asset span S by F(x) = {y : y = S∗(0)h for some h such that x = S∗(1)h, where x ∈ S}. Show that if the law of one price holds, then F is a linear functional.
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Lets break down the pricing functional Fx on the asset span S as defined Fx yy S0h for some h such t...View the full answer
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