Question: A state is called insurable if there exists a portfolio x which has a positive return if state occurs and zero return in any other

A state is called insurable if there exists a portfolio x which has a positive return if state occurs and zero return in any other state, that is,
E a xa >0 and Ersa Xa = 0, a=I

Show that every state is insurable if and only if rank R = S.

E a xa >0 and Ersa Xa = 0, a=I

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