1) Consider a model such that the initial stock price is $100 and after one period the stock is assumed to be either $200 or $50. Let C be the price at time zero of the option to buy the stock at time 1 for the price of $150. Which values of C that do not generate arbitrage? Here consider the interest rate r arbitrary satisfying 0-r 1. 2) Consider a binomial model with u = 100%, d =-50%, and the initial price is $100. Calculate the time zero price of a call option that will expire in two periods (T 2) and has a strike price of $150. Here consider the interest rate r arbitrary satisfying 0-r