A stock is currently priced at $25. Assume the price dynamics of the stock are modelled using the Geometric Brownian Motion approach: St+=Stexp[(r22)+zt+] where assume that (which is the annualized volatility) =20% per annum; r (annualized risk free rate) =5% per annum compounded continuously, and z(i,t) is a random draw from a standardized normal distribution of N(0,1). A trader attempts to price a European-style derivative written on the stock. The derivative has T=3 months to expiry. The derivative has the following payoff function: Payoff=ST262ST25STifST26if25ST