(A) What is Gama of an Options price? How does it affect the prices of calls and puts on a stock?

(B) XYZ Companys Stock price is currently Rs. 20/-. It is expected that it can either increase to Rs. 24/- or decline to Rs.16/- at the end of three months. If the risk free interest rate is 8.00 percent per annum, what is the value of three months European call option on the stock with a strike price of Rs. 22? Verify whether no-arbitrage arguments and risk-neutral valuation arguments give the same answer.