Write the matrix of payoff and find at least one set of


Consider an economy with three states and three assets. Asset A has returns 2, 3, and 7, asset B – 5, 7, and 5, asset C – 5, 6, and 7 in states 1, 2, and 3 respectively. Write the matrix of payoff and find at least one set of prices such that arbitrage is possible. Prove the arbitrage opportunity.

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Financial Management: Write the matrix of payoff and find at least one set of
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