5. Shinto Carbon Steel Company's stock price at the beginning of a 6-month period is $40 per share. At the end of the period, there is a 50 percent chance that the stock will increase in value to $50 and a 50 percent chance that it will fall in value to $38 per share. An option on the stock can be exercised only at the end of the period and at an exercise price of $41. The risk-free rate is now 5 percent per period.