20.4. Future prices of a stock are modeled with a 1-period binomial tree. You are given: (i) The stock's current price is 40. (ii) The continuously compounded risk-free interest rate is 5%. (iii) The stock pays no dividends. (iv) u = 1.2 and d =0.8. For a European put option, the strike price is 40 and the price is 3.12. Determine the time to expiry for this option. 20.5. Prices of a stock are modeled with a 1-period binomial tree having a period of 6 months. You are given: (i) The stock's initial price is 40. (ii) The continuously compounded risk-free interest rate is 5%. (iii) The stock pays continuous dividends at a rate of 2%. (iv) The risk-neutral probability of an increase in stock price is 0.55. (v) In the binomial tree, u and d are selected so that their arithmetic average is 1. A European call option on the stock expiring in 6 months has strike price 45. Determine the option premium