2. The diagram below presents stock price movements. By considering the binomial option pricing model, where each time step is 4 months long and the continuously compounded risk free rate is 5% : i. calculate the price of a one year European call option with a strike price of $80. ii. calculate the price of a one year European put option with a strike price of $80. 3. State and explain the assumptions, advantages and limitations of the Binomial Option Pricing Model. 2. The diagram below presents stock price movements. By considering the binomial option pricing model, where each time step is 4 months long and the continuously compounded risk free rate is 5% : i. calculate the price of a one year European call option with a strike price of $80. ii. calculate the price of a one year European put option with a strike price of $80. 3. State and explain the assumptions, advantages and limitations of the Binomial Option Pricing Model