Answer Question 1 and one other question. Both questions are equally weighted and account for 50% of the paper. 1. Answer three parts of this question. Your answers for each part should be no more than two pages long. A.In the Binomial Model of option pricing, the risk neutral probability of an upward movement in the underlying stockprice will be different for two identical stocks if one pays a dividend and the other does not. Is this statement true false or uncertain? Explain your awnser fully. B. Describe how you could hedge an equity portfolio using stock index put options. C. Assuming that the reference entity defaults after 1 year and 9 months, describe the cashflows arising from a 2 year CDS contract, with notional principal of 50 million and a credit default spread of 100 basis points that is initatied today. Premium payments are made semi annually in arrears.