(b) Consider a market with 4 assets and 4 states defined by D=2411211014101110,p=0.91.70.80.2 Is this market arbitrage-free? If not, find an arbitrage portfolio. (5 marks) (c) The current price of a certain share is 64 pence and the price evolves according to the standard Binomial model with u=2 and d=1/2. As usual, the one-period interest rate is denoted by R%. A binary call option with strike price 100 pence and expiry time 3 pays 200 pence if the share price finishes above 100 pence and nothing otherwise. i. Derive (do not simply state) an expression for the risk-neutral probability of an upward step in terms of R. (b) Consider a market with 4 assets and 4 states defined by D=2411211014101110,p=0.91.70.80.2 Is this market arbitrage-free? If not, find an arbitrage portfolio. (5 marks) (c) The current price of a certain share is 64 pence and the price evolves according to the standard Binomial model with u=2 and d=1/2. As usual, the one-period interest rate is denoted by R%. A binary call option with strike price 100 pence and expiry time 3 pays 200 pence if the share price finishes above 100 pence and nothing otherwise. i. Derive (do not simply state) an expression for the risk-neutral probability of an upward step in terms of R