ShowALLyour work and use EXCEL for graphs.That means you will want to have long tables explaining each data point.For each graph in this class, you will need to have at least 50 data points.Make sure your graphs have titles and as little black space as possible.These rules apply for the entire term).

1)A (10 points):You own a share in Red Hat.Every period it has a 15 percent chance of going bankrupt.The interest rate is 0.If it survives to the end of the first period, it will pay $2 in dividends, $3 in dividends at the end of the second period, $3 in dividends at the end of the third period, and $4 in dividends at the end of the fourth period.It will pay no dividends after the end of the fourth periodWhat is its efficient market price at the beginning of the first period?

B:Hula Hoops has an eight percent chance of going bankrupt each period.In period seven it will pay $30, if it survives. The interest rate is 0.Prior to that point, and afterwards, it will pay nothing.What is the efficient market price for Hula Hoops at the beginning of period 1?