Future prices of a stock are modeled with a two-period binomial tree, each period being one year.

You are given:

(i) The initial stock price is 50.

(ii) The continuously compounded risk-free interest rate is 3%.

(iii) The stock pays continuous dividend at a rate of 6%.

(iv) = 0.3 Calculate

(a) the premium of a European call option on the stock with strike price 60 and expiring in 2 years;

(b) the premium of an American call option on the stock with strike price 60 and expiring in 2 years