Consider a binomial world in which the current stock price of 50 can either go up by 10 percent or down by 8 percent. The risk-free rate is 4 percent. Assume a one-period world. Answer the following question about a Put with an exercise price of 50.

1. What will be the price of the stock in time 1? (5 points)
2. What will be the value of the Put at time period 0, and 1? (10 points)
3. What will be the hedge ratio at time 0 and Illustrate the trading strategy based on hedge ratio at time period 0?? (5 points)