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115 changes: 17 additions & 98 deletions lectures/harrison_kreps.md
Original file line number Diff line number Diff line change
Expand Up @@ -233,57 +233,14 @@ It records implications of Harrison and Kreps's specifications of $P_a, P_b, \be
```{raw} html
<div class="content-table"></div>
```











































|$|s_t|$|0|1|
|$ s_t $|0|1|
|:---------------------:|:----:|:----:|
|$|p_a|$|1.33|1.22|
|$|p_b|$|1.45|1.91|
|$|p_o|$|1.85|2.08|
|$|p_p|$|1|1|
|$|\hat{p}_a|$|1.85|1.69|
|$|\hat{p}_b|$|1.69|2.08|
|$ p_a $|1.33|1.22|
|$ p_b $|1.45|1.91|
|$ p_o $|1.85|2.08|
|$ p_p $|1|1|
|$ \hat{p}_a $|1.85|1.69|
|$ \hat{p}_b $|1.69|2.08|

Here

Expand Down Expand Up @@ -571,55 +528,17 @@ He emphasizes how limiting short sales and limiting leverage have opposite effec
Recreate the summary table using the functions we have built above.











































|$|s_t|$|0|1|
```{raw} html
<div class="content-table"></div>
```
|$s_t$|0|1|
|:---------------------:|:----:|:----:|
|$|p_a|$|1.33|1.22|
|$|p_b|$|1.45|1.91|
|$|p_o|$|1.85|2.08|
|$|p_p|$|1|1|
|$|\hat{p}_a|$|1.85|1.69|
|$|\hat{p}_b|$|1.69|2.08|
|$p_a$|1.33|1.22|
|$p_b$|1.45|1.91|
|$p_o$|1.85|2.08|
|$p_p$|1|1|
|$\hat{p}_a$|1.85|1.69|
|$\hat{p}_b$|1.69|2.08|

You will first need to define the transition matrices and dividend payoff vector.

Expand Down