A stock has a current price of $150, an annual volatility of returns of 10%, and pays no dividends. The risk-free rate is 10%. Consider a 6-month European call option on this stock with a strike price of $120 and a 2-period binomial options pricing model.

Question 1: What is the payoff of the option if the stock price goes up twice?

Question 2: What is the payoff of the option if the stock price goes up then down?

Question 3: What is the payoff of the option if the stock price goes down twice?