Problem 1 (10 marks). Consider a stock whose price today is $50. Suppose that over the next year, the stock price can either go up by 6%, or down by 3%, so the stock price at the end of the year is either $53 or $48.50. The interest rate is 4%. There also exists a call option on the stock with an exercise price of $50. I) Find the price of the call option using risk-neutral probabilities