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Consider the economy (above) again where the following set of stocks is traded: x 1 =(2,2,0)    x 2 =(1,0,3)  x 3 =(0,2,4)        for the prices (p 1 , p 2 , p 3 )=(1, 1, 1).

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Suppose a $1,000 face value bond has a coupon rate of 8.5 percent, pays interest semi-yearly, and has an eight-year life. If investors are willing to take a 10.25 percent rate of r

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