We consider a market that consists of a dividend-paying stock and a risk-free asset. Suppose we have an option written on the stock that has payoff VT = V if Sr=u.So and Vr = Vd if Sr=dSo. Find the no-arbitrage price of this option and express it in terms of a mathematical expectation of the discounted option payoff (1+r)-VT under probability measure Q. What are the probabilities of Sr=u.So and ST = d.So respectively under Q? We consider a market that consists of a dividend-paying stock and a risk-free asset. Suppose we have an option written on the stock that has payoff VT = V if Sr=u.So and Vr = Vd if Sr=dSo. Find the no-arbitrage price of this option and express it in terms of a mathematical expectation of the discounted option payoff (1+r)-VT under probability measure Q. What are the probabilities of Sr=u.So and ST = d.So respectively under Q?