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@kangkan ....I m able to solve the part b of 4B
I first let the weight that are given to the 3 states as w1, w2, and w3 respectively
Since on the basis of these weights securities 1, 2 and 3 are priced today so that these are fairly priced so that if weights differ in any two securities for computing price today will give profit opportunity by trading.
So this is valid for the new security as well.
And if price of new security must be such that the profit opportunity isn't there by trading existing securities then the weights must be w1, w2 and w3 for each state respectively!
So u ll get 3 equations ie
w1 + w2 + w3 = 4
w1 + 3w2 -w3 =1
-w1 -w2 = 5
Where LHS Is Price tomorrow and RHS is price today
From this u can compute current price of new security
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