A Necessary and Sufficient Condition to Rule Out Arbitrage Profits $\gt$

question 21

Multiple Choice

A necessary and sufficient condition to rule out arbitrage profits in the binomial tree is that the following must hold:

• A) "up factor \(\gt\) down factor \(\gt\) dollar return" [U \(\gt\) D \(\gt\) (1 + R)]
• B) U\(\gt\)(1 +R)\(\gt\) D
• C) (1 + R)=U \(\gt\) D
• D) (1 + R)=(U + D)/2
• E) None of these answers are correct.

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Definitions:

Psychodynamic Therapy

A therapeutic approach focusing on revealing and resolving unconscious conflicts through conversation and exploration of past experiences with a therapist.

Paranoid Personality Disorder

A mental health condition characterized by a pervasive distrust and suspicion of others' motives, leading to significant social and interpersonal difficulties.

Avoidant Personality Disorder

A mental disorder characterized by a long-standing pattern of significant social inhibition, feelings of inadequacy, and extremely sensitive to what others think about them.

Sensitive To Criticism

A personality trait or condition where an individual exhibits an above-average response to criticism, often experiencing distress, anxiety, or anger as a result.