Time left 2:05: There are two future states and three securities with the associated payments matrix...

 

Transcribed Image Text:

Time left 2:05: There are two future states and three securities with the associated payments matrix (states by securities) 8 18 Q = (18 / 12) 2 The first security current price is 9, the second security current price is 5 and the third security current price is 14. Are there any arbitrage opportunities? Hint: the calculations do not require matrix inverse. Select one: No, all securities are fairly priced and there are no arbitrage opportunities Yes, there are arbitrage opportunities The market is incomplete, and therefore it is not possible to answer this question Time left 2:05: There are two future states and three securities with the associated payments matrix (states by securities) 8 18 Q = (18 / 12) 2 The first security current price is 9, the second security current price is 5 and the third security current price is 14. Are there any arbitrage opportunities? Hint: the calculations do not require matrix inverse. Select one: No, all securities are fairly priced and there are no arbitrage opportunities Yes, there are arbitrage opportunities The market is incomplete, and therefore it is not possible to answer this question

Answer rating: 100% (QA)

Question The correct answer is A No all securities are ... View the full answer