Assume a one-period (annual) binomial model with the following characteristics: current stock price is $25, the up factor for each period is 1.05, the down factor for each period is 0.95, and the risk-free rate is 3 percent.

(a) (4 pts) Draw the binomial tree for the stock with the appropriate pricing.

(b) (2 pts) What is the current hedge ratio for a European call for that stock if it has a strike price of $22 and will expire in one year?

(c) (2 pts) What is the current value of that same call?