1. The current price of KD Industries stock is $20. In the next year the stock price will either go up by 20% or go down by 20%. KD pays no dividends. The one year risk-free rate is 5% and will remain constant. Using the binomial pricing model, the calculated price of a one-year call option on KD stock with a strike price of $20

2. Using the binomial pricing model, the calculated price of a one-year put option on KD stock with a strike price of $20

3. Construct a binomial tree detailing the option information and payoffs for a call option with a $20 strike price that expires in one year.