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QUESTION

Consider three assets A, B and C whose payos in the in the two states 1 and 2 are shown below. Only two of these three assets are traded in a certain...

Consider three assets A, B and C whose payoffs in the in the two states ω1 and ω2 are shown below. Only two of these three assets are traded in a certain market.

A B C

ω1 78 87 66

ω2 39 35 33

Markets are not complete if asset________ and asset ______ are traded. 

(A) A, B

(B) A, C

(C) B,

C (D) Markets are incomplete for more than one of the above combinations (E) Not enough information is supplied to conclude any of the above.

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