Two securities have the following payo?s:
State Future Prices Security G Future Prices Asset H
1 $10 $30
2 $20 $10
The current prices are G(1) = $8 and H(1) = $9. Both future states are equally likely. Your initial endowment (current wealth) is $720. (a) If you wanted to purchase a completely risk-free portfolio, how many units of G and H would you buy (fractional units are per-mitted)? (b) What will be the implied risk-free return?