An equity index call option with an exercise price of $105 will expire in 9 months. The index is worth $98 and has a standard deviation of 0.20 (20%). the index's annual dividend yield (q) is 2%. the annual risk-free rate is 5%. the length of one binomial period (t) is 3 months or .25 year.

A. Estimate the call price today (C) from the Three-period Binomial model.

B. Find the price of an equivalent European put from the binomial model using put-call parity relation (Hint: use the dividend adjusted stock price (or S₀ e^-qT) in put-call parity)