Microsoft Word - Microsoft Word + - - AAA A :Fg--, 3 BIUX, * A | 2 A. A 12 2. (5 marks) Consider the one-period binomial tree model discussed in L1.38-39. We introduce two positive numbers u = S./So and d = Sa/So. Show that to rule out arbitrage in this model, we must have 0 Microsoft Word - Microsoft Word + - - AAA A :Fg--, 3 BIUX, * A | 2 A. A 12 2. (5 marks) Consider the one-period binomial tree model discussed in L1.38-39. We introduce two positive numbers u = S./So and d = Sa/So. Show that to rule out arbitrage in this model, we must have 0