Let S$(0)=120$ u $=1\mathrm{.}2($annual$)$; d $=0\mathrm{.}9($annual$)$ and r $=0\mathrm{.}1$ Compare an American call with European call with strike price K $=120$ and exercise time $2$ years.

Use two period binomial model to find the option price $()$ Find the option price if a $15$ Rs dividend is paid after one year. $(3)$