1. In a single period binomial model, the current underlying stock price is $10, in each period the stock can either go up by 15% or down by 10%. The time 0 price B0 of the ZCB (zero coupon bond) maturing at time 1 is B0 = 0.9525. (a) Use stock price as the numeraire, determine the equivalent martingale measure, i.e., the share measure, q for the up state. (b) Use martingale pricing to determine the price of a straddle struck at K = $10