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Todays price of Capital One Financial Corporation (COF) is $50. COF does not pay dividends. One year from today, there are two possible states. In

Todays price of Capital One Financial Corporation (COF) is $50. COF does not pay dividends. One year from today, there are two possible states. In the u state, the price of COF is $100. In the d state, the price of COF is $25. The c.c. risk-free interest rate is zero percent. Assume there is no arbitrage. A power derivative has payoffs Xu = Su2 and Xd = Sd2. What is the price of a power derivative on COF, and a fraction derivative has payoffs Xu = Su/10 and Xd = Sd/10. What is the price of a fraction derivative on COF?

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