The price in one year of risky asset, Stock A, currently sold at €100, will depend on the state…

The price in one year of risky asset, Stock A, currently sold at €100, will depend on the state of the world. State boom and state recession are equally likely (probability 0.5) and Stock A will be sold at €120 in a boom and at €100 in a recession. The annual risk-free rate for bank deposits and loans in the economy is 5%. An investment bank offers a product called “Better than A”, with the following characteristics: • Investment today – €220 • Payoff in one year – €320 in a boom, €200 in a recession Is this a good investment? What is the maximum fair price for the payoff profile of “Better than A”?