Consider 9-month European-syle options written on XYZ stock. Its current stock price is $80, its income rate is 2%, and the stock volatility rate is 25%. Assume the risk-free rate is 5%.

1.Compute the value of a 9-month call with exercise $80. Use the binomial method with tree time steps for the option's life in your computations. Use the CRR coefficient.

2.The condition is the same as the above condition.

Now use the Jarrow-Rudd parameter to compute the call option price.

3. The condition is the same as the above condition.

Now use the Black-Scholes-Merton formula to compute the call option price.