1. Use two-step binominal tree model to price call option value The stock price starts at $20 and in each of two time steps may go up by 10% or down by 10%. Each time step is three months long and the risk-free interest rate is 12% per annum. We consider a six-month option with a strike price of $21, and the up factor (u)=1.1 and down factor (d)=0.9