3. A European call has strike $22 and expires in three months. The underlying asset is currently worth $21, the yearly volatility is 45% and the continuously compounding interest rate is 0.3% per month. (a) Calculate the premium of this call using the Black-Scholes model. (b) Convert the problem into a two-step binomial model and again calculate the premium of the call. (c) Say we do not know the volatility, but we do know that the European call premium is C(0)=$1.500. Calculate the implied monthly volatility using the Black-Scholes model. Explain your methodology for calculating this monthly volatility. 3. A European call has strike $22 and expires in three months. The underlying asset is currently worth $21, the yearly volatility is 45% and the continuously compounding interest rate is 0.3% per month. (a) Calculate the premium of this call using the Black-Scholes model. (b) Convert the problem into a two-step binomial model and again calculate the premium of the call. (c) Say we do not know the volatility, but we do know that the European call premium is C(0)=$1.500. Calculate the implied monthly volatility using the Black-Scholes model. Explain your methodology for calculating this monthly volatility