Exercise 13 Let S = 100 be the stock price, which after time t = 1 can only change up Su = 120 or down Sa = 80. Compute the risk-neutral probabilities of up move and down move, assuming that the risk-free interest rate r = 0.07. Price a call option with strike price 110. Price a call option with strike price 105. Price a put option with strike price 110. Price a put option with strike price 105. Exercise 14 Use replicating portfolio method to price the call and put options in the previous Exercise 13. Exercise 13 Let S = 100 be the stock price, which after time t = 1 can only change up Su = 120 or down Sa = 80. Compute the risk-neutral probabilities of up move and down move, assuming that the risk-free interest rate r = 0.07. Price a call option with strike price 110. Price a call option with strike price 105. Price a put option with strike price 110. Price a put option with strike price 105. Exercise 14 Use replicating portfolio method to price the call and put options in the previous Exercise 13