Q5-Suppose we wanted to determine the value today of a European call option using a 2-period binomial model. The current stock price is $50 and the strike price is $48. This option expires in 1 year. The yearly rate is 10% per annum. Assume discrete time interest rates. At each time period the stock may go up with u = 1.1709, or go down by d= .8540. 1. Determine the time evolution of the stock price. (5 pts.) 2. Determine the possible option prices at the end of period 1. (5 pts.) 3. Determine the current call price. (10 pts.) Q5-Suppose we wanted to determine the value today of a European call option using a 2-period binomial model. The current stock price is $50 and the strike price is $48. This option expires in 1 year. The yearly rate is 10% per annum. Assume discrete time interest rates. At each time period the stock may go up with u = 1.1709, or go down by d= .8540. 1. Determine the time evolution of the stock price. (5 pts.) 2. Determine the possible option prices at the end of period 1. (5 pts.) 3. Determine the current call price. (10 pts.)