A stock is trading at 100.Consider a two-period binomial model in which the stock price moves up or down each period by factors $u = 1.20$ and $d = 0.80$ ,respectively.The gross risk-free rate of interest per time step is 1.04.You are long a cash-or-nothing digital call option that pays $100 if $S _ { T } \geq 100$ ,and nothing otherwise;and short a cash-or-nothing digital put option that pays $100 if $S _ { T } \leq 100$ ,and nothing otherwise.(Here, $S _ { T }$ is the stock price at the end of two periods. )The value of your portfolio is
A)Positive.
B)zero.
C)Negative.
D)Cannot be calculated from the given information.

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The Answer of A stock is trading at 100.Consider a two-period binomial model in which the stock price moves up or down each period by factors $u = 1.20$ and $d = 0.80$ ,respectively.The gross risk-free rate of interest per time step is 1.04.You are long a cash-or-nothing digital call option that pays $100 if $S _ { T } \geq 100$ ,and nothing otherwise;and short a cash-or-nothing digital put option that pays $100 if $S _ { T } \leq 100$ ,and nothing otherwise.(Here, $S _ { T }$ is the stock price at the end of two periods. )The value of your portfolio is
A)Positive.
B)zero.
C)Negative.
D)Cannot be calculated from the given information.

A Stock Is Trading at 100 u=1.20u = 1.20u=1.20 And d=0.80d = 0.80d=0.80

A Stock Is Trading at 100 $u = 1.20$ And $d = 0.80$