b) is just for information

b) Set up a general one-period binomial model (i.e. specify its compo- nents); this includes specifying conditions on its parameters which guarantee that the model is free-of-arbitrage. c) Show that the model set out in b) is free-of-arbitrage. If you quote general results you must show the parts of these results that you use. b) Set up a general one-period binomial model (i.e. specify its compo- nents); this includes specifying conditions on its parameters which guarantee that the model is free-of-arbitrage. c) Show that the model set out in b) is free-of-arbitrage. If you quote general results you must show the parts of these results that you use