3. Consider a one-period economy with two times, 0 and T. There are S 3 states and N =3 securities with payoff matrix 23 12 27 D = 30 21 37 46 27 55 (a) Describe the space of all attainable payoffs. (b) Is the market complete? Explain why or why not.

3. Consider a one-period economy with two times, 0 and T. There are S 3 states and N =3 securities with payoff matrix 23 12 27 D = 30 21 37 46 27 55 (a) Describe the space of all attainable payoffs. (b) Is the market complete? Explain why or why not.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3. Consider a one-period economy with two times, 0 and T. There are S 3 states and
N=3 securities with payoff matrix
23 12 27
D= 30 21 37
46 27 55,
(a) Describe the space of all attainable payoffs.
(b) Is the market complete? Explain why or why not.

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In the following payoff matrix, how many Nash equilibria are there?