The <fundamental theorem of asset pricing> for a finite discrete-time market states that the market is free of <arbitrage> if and only if it admits an <equivalent martingale measure>. Subject to the usual finite-market hypotheses, the arbitrage-free market is complete if and only if that measure is unique.

Solution

Past exam of the mathematics course of the University of Cambridge / 2019 / ii / Paper 2 / 29K / b / Solution

 Solution (source code)