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Alibaba stock price is currently $100. At the end of 3 months it will be either $120 or $83.33. The risk-free interest rate (quarterly compound)

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Alibaba stock price is currently $100. At the end of 3 months it will be either $120 or $83.33. The risk-free interest rate (quarterly compound) is 3% per annum. What is the value of a 3-month European call option with a strike price of $100? Calculate your answer to this problem using i) replication. (4 marks) ii) the risk-neutral method. (4 marks)

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