Algebraic Problem (3 points - Address all questions, show your work) 5) XYZ Stock is binomially distributed. For each period, it will either go up 10%, or down 20%. The risk free rate is 5%. There are no dividends. Currently, (at period 1) the stock sells for $100/share. There is a call option with strike price $90 that expires at period 3. a) What is the risk neutral probability that the stock price will go up? b) Diagram the possibilities for the stock price over periods 1, 2 and 3. c) For each possible price at periods 2 and 3, show what the option would be worth. d) What is the option delta or hedge ratio at period 1? e) What should the option be worth at period 1