A put option on a non-dividend-paying stock when the stock price is $30, the exercise price is $29, the risk-free rate is 5%, the volatility is 25% per annum, and the time to maturity is four months.

a.Use a 2-period binomial model to price this same option.

b.Use Black-Scholes formula to value this option

c.How much the European call option on this stock with the same strike (E) and time to maturity (T) will cost?

d.How much the American call with the same E and T will cost?

P.S I ONLY NEED HELP WITH A AND B. Unsure what a 2 period binomial model is and how to apply the black sholes formula to this!

This is what i got for the parts c and d

Price of the European call option:

= e ^-0.05 4/12 (0.5220 x 5.6582)

= $2.9047 or $2.91

Since there is no dividend payment the American call option is the same as the European price which is $2.91