I. Historical data tells us that the S&P 500 has an average yearly return of 7% and a yearly volatility of 17%. Suppose you were to implement an N-period binomial model to price options on the S&P 500 with a maturity of one year. Propose a choice of the return rates u and d, and the physical probabilities (p, 1-p), as to guarantee that returns of the S&P 500 eviation over l-year pected value and time horizons as implied by the data