Answers are in bold, I just need the explanation!

31. TPHB, Inc. is trading at $80 per share. You have been asked to compute some option prices on TPHB stock. You will use a two-state model and assume that if TPHB stock goes up it will increase 20% and if it goes down it will fall 15%. The risk-free rate is 5%. a. What is the price of a call option with an exercise price of 82? $7.62 b. What is the price of a put option with an exercise price of 82? $5.71 What is the price of a call option with an exercise price of 88? $4.35 d. Suppose instead that the stock price increase will be 25% and the stock price decrease will be 20%. What is the price of a call option with an exercise price of 88? What is the price of a put option with an exercise price of 82? $6.35; $7.62 C