3.An investor holds a long put that gives the right to sell an underlying asset for $49 in one year. The current underlying asset price is $50 and will increase by a factor 1.1. The continuously compounded risk-free interest rate is 5%. What is the option's value if you use the one-period binomial option pricing model? < 4. In problem 3, what is the European-style option's value if you use the two-period binomial option pricing model? 1. (Arbitrage-free condition) Consider a one-period binomial model with risk-free interest rate r0, up factor u > 0, and down factor d > 0. Prove that the one-period binomial model is arbitrage-free if and only if d