[Fin525sp09] Question on Midterm problem #3

[patrick Redmond]

Professer Gehr -
 
I do not understand question #3 on the sample midterm; could you provide some information on this probem?
 
Spcifically, how to start this problem without a Risk-free rate. I understand how to constitute an arbitrage, but not with the information provided.
 
Thanks in advance for your help,
 
Kevin Redmond

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