Question: Problem 1.3. The economic growth next year will be high, medium, or low. There are four assets, A, B, C, and D, whose value (cash

Problem 1.3. The economic growth next year will be high, medium,

Problem 1.3. The economic growth next year will be high, medium, or low. There are four assets, A, B, C, and D, whose value (cash flow) in the three states will be as follows: A B D High Growth Medium Growth Low Growth 30 60 80 60 50 40 30 60 60 50 25 0 The prices of the assets A, B, and C, are 56.60, 47.90, and 49.80, respectively. (a) What are the state prices of the three states (high growth, medium growth, and low growth)? 1 (6) What is the risk-free rate? (c) What is the price of asset D

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