Question: Assets are traded at date 0 and pay off date =T Asset price 1 is 0 and asset price 2 is 1. i. Does arbitrage

Assets are traded at date 0 and pay off date =T

D 0.5 -0.5 0.5 -1 1.5 0 

Asset price 1 is 0 and asset price 2 is 1.

i. Does arbitrage exist? If not, explain why. If there is arbitrage, show how it can be used.

D 0.5 -0.5 0.5 -1 1.5 0

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