On this page
Inspect the outside-domain input
Current price is 100, period factor 1.05 and states 130/110. Derived higher weight is (105−110)/20=−0.25. The selected both-states-possible interior setup fails.
Check the changed pricing condition
Clamping q to zero would price the underlying from terminal 110, giving 110/1.05=104.761905 today. That is not the supplied price 100. The modified weight does not preserve the original record.
Identify the unresolved input
Review price dates, quotation, state ordering, income and financing assumptions. If the case intentionally violates the model, report that condition. Do not call a clamped output a valid solution to the original equations.
| Step | Result |
|---|---|
| Derived q | −0.25 |
| Clamped q | 0, another record |
| Underlying priced after clamp | 104.761905, not 100 |
Keep the rejection specific
A rejected toy record is not proof of an available real-world arbitrage. The calculator signals its own model condition and avoids fabricating positive weights.