11.) Consider a stock trading at $400 that can go up or down by 20 percent per period. The risk-free rate is 8%. Using the one period binomial model: a. Determine the two possible stock prices for the next period. b. Determine the intrinsic value at expiration of a European call with an exercise price of $420. 4 c. Find the value of the option today. d. Compute the hedge ratio and construct the hedge portfolio. Show that the return on the hedge portfolio is the risk-free rate regardless of the outcome assuming the call sells for the value you obtained in part c