1. Suppose the price jumps of a certain stock are modeled with binomial probabilities. Its price is observed twice a day for 30 days. Assume that the probability of an upward move is p = 0.75. Using the normal distribution, find the approximate probability that at least 40 up moves occur during the observation period.

2. Find large tree calibration factors, u, d, and q, for the following stock data: r = 0.06, = 0.3, t = 0.003