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The state prices $\psi_j$ represent the prices of Arrow-Debreu securities, which are monetary values and do not necessarily sum to 1. The transformed vector $q_j$ represents risk-neutral probabilities, obtained by multiplying each state price by the gross risk-free factor $(1+i)$.

Conditions: The market is a one-period finite-state model.; $\psi_j$ are the solved state prices (Arrow-Debreu security prices).; $i$ is the per-period risk-free interest rate.; $q_j$ is defined as $q_j = (1+i)\psi_j$.

The state prices $\psi_j$ represent the prices of Arrow-Debreu securities, which are monetary values and do not necessarily sum to 1. The transformed vector $q_j$ represents risk-neutral probabilities, obtained by multiplying each state price by the gross risk-free factor $(1+i)$.

Conditions: The market is a one-period finite-state model.; $\psi_j$ are the solved state prices (Arrow-Debreu security prices).; $i$ is the per-period risk-free interest rate.; $q_j$ is defined as $q_j = (1+i)\psi_j$.