Exercise 1.17. Consider a nancial model with two times, t = 0 and t = 1, and a single stock 8'. We can buy or sell any number of shares of stock at t = 0 for the initial price of 30 = $50 per share. There is also a bank at which we can borrow or invest any amount of money between t = 0 and t = 1 at the (oneperiod) interest rate r : .1. At t : 1 the price of the stock will be either $80 or $40. The probability of 81 = $80 is g, while the probability of 31 = $40 is %. (You may take it for granted that this model is free of arbitrage.) Consider a call Option V on the stock with strike price K = $60 and expiration date T = 1. Find the arbitrage-free price V0 of the Option at t = 0