If you are a consultant, plan and undertake the project required using the three-step binomial tree to find the price of the option if T = 0.75.A nine-month American put option on a non-dividend-paying stock has a strike price of $49. The stock price is $50, the risk-free rate is 5% per annum, and the volatility is 30% per annum. (3 marks for the correct process + 2 marks for the correct answer = 5 marks) + (5 marks correct synthesis of steps) = 10 marks )

b. If you assume the stock is priced today at BD 62. The stock has an option that has an exercise price of BD 60 and will expire 42 days from now. The same stock has a volatility of 32% and is currently trading in a period where the risk-free rate is 4%. Use the investment skills to investigate the value of the option if it is a call option? (2 marks for the correct process + 1 mark for the correct answer =3 marks)