1. Suppose XYZ stock is trading at So=$1.01, u=1.02, d=1/1.02. The period risk-free rate is 1%, and the stock pays no dividends. Using the n-period BOPM, determine the equilibrium price of an XYZ 100 European call expiring at the end of the third period (n=3).
2. Discuss the legal environment in which the rules and principles of Australian tax law operate, basics of the Australian legal system as they apply to Australian tax law, Constitutional considerations and the separation of powers.