In a world with three possible states (1, 2, 3) and three assets (A, B, C), the payoff matrix looks like this:
$r_A;_1,_2,_3 = 110, 110, 110$ $p_A = 100$
$r_B;_1,_2,_3 = 100, 50, 40$ $p_B = 70$
$r_C;_1,_2,_3 = 48, 40, 36$ $p_C = 40$
Now we add asset D in portfolio:
$r_D;_1,_2,_3 = 0, 0, 10$ $p_D = ? $
How can one calculate a price of the asset D via risk neutral probability ethod?
