Consider the one-step binomial pricing model for options. The asset has a current spot price So, and the current interest rate is r. The asset price, over a time dt, can either go up to us, or down to dSo with probability p and q =1-p. Show that the discounted expected value of the asset at time dt (using the risk-free probability) is its current value So, namely -rtE*(St) = So. where E* indicates an expected value using the appropriate risk-neutral probabilities. Consider the one-step binomial pricing model for options. The asset has a current spot price So, and the current interest rate is r. The asset price, over a time dt, can either go up to us, or down to dSo with probability p and q =1-p. Show that the discounted expected value of the asset at time dt (using the risk-free probability) is its current value So, namely -rtE*(St) = So. where E* indicates an expected value using the appropriate risk-neutral probabilities