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The following is a Binomial Option Pricing Model question. There will be 7 questions asked about it. Since the order of questions chosen is random, I suggest you solve the following all at once and choose your answer to each part as it comes up. You will be asked the following questions: 1. What are the values of the calls at maturity, t=2? 2. What are the values of the calls at t =1? 3. What is the initial (t = 0) fair market price of the call? 4. What is the initial (t = 0) hedge ratio? 5. What are the hedge ratios at t = 1? 6. If one call was written initially, what is the value of the hedged portfolio one period later (t = 1)? 7. If the stock moves down in period 1 how would you adjust your t = 0 hedge by trading only stock? We have a 2-state, 2-period world (i.e. t = 0, 1, 2). The current stock price is 100 and the risk-free rate each period is 2%. Each period the stock can either go up by 10% or down by 10%. A European call option on this stock with an exercise price of 100 expires at the end of the second period. What is the initial (t = 0) fair market price of the call