Consider three securities that pay cash flows over the next year. Their cash flows in one year depend on the market condition which could be either good (with a probability of 50%) or poor (with a probability of 50%). Security A B Market Price Today 100 150 ??? Cash Flow in One Year Poor Economy Good Economy 420 0 0 210 840 4200 a) What is the no-arbitrage price for security C? b) Suppose that security C had an expected return of 25%, describe what arbitrage opportunity exists and how you would exploit it