a. A stock price is now at $100. It can go up next year to $120 or fall to $80. The risk-free sukuk rate is 8 percent. Compute the martingale (risk-neutral) probabilities and today’s state prices of Arrow-Debreu securities.

b. A stock price is now at $100. It can go up after 77 days to $120 or fall to $80. The risk-free sukuk rate is 8 percent. Compute the martingale probabilities (risk-neutral) and today’s state prices of Arrow-Debreu securities.

c. A call option maturing in 77 days with a strike at $106 is written on the stock. Compute its price today.