The volatility of an assets return can be broken into diversifiable (i.e., unsystematic or firm-specific) and non-diversifiable (i.e., systematic) components. Investors who hold the asset should be compensated only for the non-diversifiable risk, which is measured by the beta of the asset. A stock that has a zero beta has no systematic risk and its expected rate of return should equal the risk-free rate. Suppose that you have two different stocks:

• S&P 500, which has a beta of 1.00 and 100% of its volatility is non-diversifiable;
• CURE Inc., which is developing a new cure for cancer, which has a zero beta because 100% of its volatility is firm specific and thus diversifiable.

BOTH stocks have IDENTICAL stock price trees (each is currently priced at $50 a share, and in one period it will be worth either $45 or $55). How would the differences in their betas affect the current prices of their call and put options? EXPLAIN.