I. Consider one-period binomial tree of the stock price. You are given: S = $10U, T = 1 year, r = 8%, u = 1.3, d = 0.8, and = 0. 1) Determine the premium of a 90-strike European put. 2) Suppose you observe a 90-strike European put price of $5. How would you arbitrage? 3) Suppose you observe a 90-strike European put price of $3. How would you arbitrage? 2. Consider one-period binomial tree of the stock price. You are given: S = $100, K = $105, T = 1 year, r = 8%, u = 1.3, d = 0.8, and = 2%. 1) Determine the premium of a 105-strike European call. 2) Suppose you observe a 105-strike European call price of $14. How would you arbitrage? 3) Suppose you observe a 105-strike European call price of $10. How would you arbitrage