Business, 23.09.2019 21:30 nockturnal1993

Acall option with exercise price x on an asset pays max(as − x, 0) in state s, where as is the asset payoff in state s. suppose that only asset a exists in this market (not b or c), but that call options on asset a may also be bought or sold with any desired nonnegative exercise price x. show how to synthetically construct the arrow–debreu securities, as well as the risk-free asset

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Acall option with exercise price x on an asset pays max(as − x, 0) in state s, where as is the asset...

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