a)What is the price of an American-style call option assuming a 4% annual risk-free rate, a strike price = $150, and 3 years to maturity.In each year the price can either rise by a factor of 1.3 or fall by a factor of 0.9.The current price of the underlying asset is $100 and it pays no dividends. (4 marks)

b)Why is the price in part a different than you would get from inputting a 10% drift and 20% volatility into the Black Scholes equation? (2 marks)