- The stock's price S is $100. After three months; it either goes up and gets multiplied by the factor U=1.13847256, or it goes down and gets multiplied by the factor D=0.88664332. - Options mature after T=0.5 year and have a strike price of K=$105. - The continuously compounded risk-free interest rate r is 5 percent per year. - Today's European call price is c and the put price is p. Call prices after one period are denoted by ci in the up node and coin the down node. Call prices after two periods are denoted by cw in the "up, and then down node" and so on. Put prices are similarly defined. Call prices (in dollars) are given by: 1. c=8.81,cV=17.84,cw=36.11, and zero at other nodes 2. c=7.68,c=15.09,c0=0.47,cv=29.61,cio=0.94,c10=0 3. c=4.78,cv=9.69,c=19.61, and zero at other nodes 4. c=6.00,cv=12.16,cw=24.61, and zero at other nodes 5. None of these answers are correct