Solution

ID: past-exam-of-the-mathematics-course-of-the-university-of-cambridge/2026/ii/paper-1/30l/b/solution

The time-zero indifference price is the unique satisfying
The left side is continuous and strictly decreasing in the cash amount by part (a), and its limiting values bracket ; existence follows by the intermediate-value theorem and uniqueness by strict monotonicity.

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