Question: Question 1 Give a short answer / result without explanation. a) Consider a binomial model with Sn = 100, pa = 0.8, pd = 0.2,

Question 1 Give a short answer / result without explanation. a) Consider a binomial model with Sn = 100, pa = 0.8, pd = 0.2, \"r = 0, u = 1.05, d = 0.95, T = 1. What is the price of a digital option, that pays 1 if ST 2 102 and 0 else? b) Consider a binomial model with SD = 100,101.L = 0.4.105; = 0.6, \"r = 0, u = 1.1, T = 1. Assume that the noarbitrage price of an atthemoney call option is 13. What is d

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