Starting with the three fundamental equations for the equal-probability (Jarrow-Rudd) binomial model, show that when the time steps are small the parameters of the model are given by U d = = = 0.5 er-0/2)41+0 At (r-0/2)M-0-AL where r is the risk-free interest rate, o is the volatility and At is the time step size. State all assumptions used in your derivation.