A customized option on a stock pays the option holder (S-K)^2 where S is the stock price at maturity, one week from now, and K is $54. The current stock price is $50. There are only two possibilities one week from now, that the stock is $59 with probability 70%, or that it's $47 with probability 30%. Taking dividends and interest rates to both be zero, compute the price of this derivative using a one-step binomial tree. Compute the derivative price two ways:

1) by setting up a delta-hedged portfolio and working out the cost

2) by determining risk-neutral probabilities and applying them.