Question: Assume a single period binomial model with d = 1.1, u = 1.3, p = 0.7 and S0 = $30. Use the mathematical definition of

Assume a single period binomial model with d = 1.1, u = 1.3, p = 0.7 and S0 = $30. Use the mathematical definition of arbitrage, and show that if the risk-free rate over a single period is 10% then there exists an arbitrage opportunity in this market. You need to give the arbitrage portfolio and provide sufficient details.

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