Problem 7. Suppose that the price of a security in each time period is its price in the previous time period multiplied either by u = 1.1 or by d - 1/. The initial price of the security is S(O) = 100. Consider an investment that returns (100 - S(5))+ after 5 periods only if the price after a periods is greater than 120. Suppose the interest rate per period is r=0.1. What is the no-arbitrage cost of the option at time 08 Problem 7. Suppose that the price of a security in each time period is its price in the previous time period multiplied either by u = 1.1 or by d - 1/. The initial price of the security is S(O) = 100. Consider an investment that returns (100 - S(5))+ after 5 periods only if the price after a periods is greater than 120. Suppose the interest rate per period is r=0.1. What is the no-arbitrage cost of the option at time 08