Consider the OLD stock that follows the recombining (Cox-Ross-Rubenstein) Binomial model depicted below. Assume that the continuously compounded risk free interest rate is 20% per annum for all maturities.

(a) Use the Binomial tree to calculate todays price of a (vanilla) at-the money European call option on the OLD stock that matures in 6 months. Keep at least four decimals in all your calculations. Round of your nal answer to two decimals.

(b) If you want to create