Question 3 4 pts Suppose the risk free rate is 5%. A five-step binomial tree model is used to value an option on a futures contract with one year to expiration. Suppose d = 0.85 and u = 1.15. What is the risk neutral probability of an up movement in the price of the futures (p)? 50.00% 48.91% 43.84% 49.29% Question 4 4 pts A tree is constructed to value an option on an index that is currently worth 100 and has a volatility of 25%. The index provides a dividend yield of 2%. Another tree is constructed to value an option on a non-dividend-paying stock that is currently worth 100 and has a volatility of 25%. The parameter p is the same for both trees but u is not The parameters p and u are the same for both trees. Can not determined. The parameter u is the same for both trees but p is not. Question 3 4 pts Suppose the risk free rate is 5%. A five-step binomial tree model is used to value an option on a futures contract with one year to expiration. Suppose d = 0.85 and u = 1.15. What is the risk neutral probability of an up movement in the price of the futures (p)? 50.00% 48.91% 43.84% 49.29% Question 4 4 pts A tree is constructed to value an option on an index that is currently worth 100 and has a volatility of 25%. The index provides a dividend yield of 2%. Another tree is constructed to value an option on a non-dividend-paying stock that is currently worth 100 and has a volatility of 25%. The parameter p is the same for both trees but u is not The parameters p and u are the same for both trees. Can not determined. The parameter u is the same for both trees but p is not