3. 18 POINTS A 9 month European call option on a nondividend paying stock has K = 78. So = 80, r = 4% per year and o = 20% per year. (a).Find u and d and the risk neutral probability p. (6) Using a 3 step Binomial Option Pricing Model, find the price of a 9 month European call option. Draw the tree and write the relevant information (the stock price above and the value of the option below) at each node. (C) If the option were American instaed of European, when would it be optimal to exercise early