Consider a financial-markets economy with three states: $s_0$, $s_1$, $s_2$. There are also three financial assets: $a$, $b$, $c$ whose (gross) returns in each state are:
| Asset | State $\quad s_0$ | State $\quad s_1$ | State $\quad s_2$ |
|---|---|---|---|
| Asset $a$ | -1 | ? | ? |
| Asset $b$ | -1 | ? | ? |
| Asset $c$ | -1 | ? | ? |
Question 1: Are there arbitrage opportunities in this economy?
Question 2: Create a portfolio to exploit the arbitrage opportunity
Enter the dollar amount you would invest in each asset. If you are selling (shorting) an asset, enter a negative amount.