Question: 2. Suppose that there are three dates, t = 0,1,2. There are two assets, a long-lived riskless asset and a short-lived risky asset. The long-lived

2. Suppose that there are three dates, t = 0,1,2. There

2. Suppose that there are three dates, t = 0,1,2. There are two assets, a long-lived riskless asset and a short-lived risky asset. The long-lived asset is tradable at both t = 0 and t = 1. It has a riskless return of R between t = 0 and t = 1. Between t = 1 and t = 2 this asset has a riskless return of either Ri or R2, with Ri

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