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  3. 2. consider a discrete-time financial market consi

2. Consider a discrete-time financial market consisting of a risky asset and a risk-free asset....

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2. Consider a discrete-time financial market consisting of a risky asset and a risk-free asset. The prices of the risky and risk-free assets at time t (where 1 = 0,1,2,...) are denoted by S(i) and A(0) dollars, respectively. Let the prices A(0) = 100, A(1) = 105, S(O) = 100 and 110, with probability p. S(1) = 90, with probability 1 - p. where 0

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