(3) Leonard Talbot observes that there are three options, all with identical prices. The price...
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(3) Leonard Talbot observes that there are three options, all with identical prices. The price of the first will increase by 10% if the market goes up, and decrease by 10% if the market goes down. The second will increase in value by 20% if the market is up, and decrease by 15% if the market is down. The third will increase by 16% if the market is up and decrease by 20% if it is down. Describe an arbitrage opportunity
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