(a) A one-step binomial tree is used to model the impact of an important announcement on the stock price of Company XYZ. There is a 50% chance that the announcement will be positive for the company. The Company does not pay dividends. Current stock price = K20 Stock price after good news = K30 Stock price after bad news = K15 Time period = 3 months Risk-free rate (continuous compounding) = 5 % Calculate the price of a 3-month call option on the Company stock with strike price equal to K22.