7. Suppose MSFT is currently trading at $305 at could go up to $325 or down to $280. Assume the 1-month interest rate is 5.5%. We are interested in finding the price of a put option. i. What is the hedge ratio according to the binomial model? ii. What is the price of a put option at 305 using the binomial model? iii. Using the put-call parity, what is the price of a call option? iv. Re-do parts (i) and (ii) but now using a call option at 305. Does your answer matches to what you found on part (iii)? v. If interest rates were to increase, all else the same how would that affect the price of the put options? All else the same, how would an increase in the interest rates affect the price of call options