Arbitrage p1=(1+r)po L.e. tomorrow' s price is the future-value of todays price. Equivalently, p1 p0-1+r L e. today's price is the present-value of tomorrow's priceArbitrage p1 = 1+ r p0 ( ) I.e. tomorrow’s price is the future-value of today’s price. Equivalently, p p r 0 1 1 = + . I.e. today’s price is the present-value of tomorrow’s price