Solution

ID: past-exam-of-the-probability-statistics-and-options-ii-course-of-the-university-of-oxford/2007/s/3/b/solution

An old shortest graph path is still allowed at stage , so . Concatenating shortest -- and -- paths gives a walk of length , but it may repeat vertices. Every repeated section is a closed walk. In the absence of negative-length cycles in a graph, each such closed walk has nonnegative length: decompose it into simple cycles. Removing these sections therefore produces an allowed simple graph path of no greater length. This proves the other upper bound. Together with part (a),

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